Saturday, June 8, 2013

EnerMech Scores Work for BG Group's North Sea Fields

Mechanical engineering services company, EnerMech, has been awarded a process services contract by BG Group which could be worth up to $24 million (GBP 16 million).

The three year contract (+1 year option) covers all BG Group's UK North Sea assets including the Lomond, North Everest and Armada platforms.

The workscope includes the provision of topside process, flange management and nitrogen services and is the first contract EnerMech has secured with BG Group.

Aberdeen-based EnerMech said the contract win will create new jobs and take its total workforce to more than 1,400.

EnerMech's director of Process, Pipeline & Umbilicals, Les Graves, said: "We are looking forward to assisting BG Group in supporting their assets in the North Sea and this award reaffirms our position as a major supplier of process services to the oil and gas sector."

In January EnerMech acquired Australian valves engineering and servicing company, Valve Tech Engineering, in a multi-million pound deal which followed the acquisition in December of Cape Town based Water Weights International SA (Pty) Ltd which specializes in heavy load testing of cranes and lifting equipment.

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North Sea Oil Industry 'Needs UK's Stability'

North Sea Oil Industry 'Needs UK's Stability'

The oil and gas industry is better supported as part of the UK than it would be in an independent Scotland, Coalition ministers have claimed, as they pledged to help boost investment and promote exports.

Scottish Secretary Michael Moore, Business Secretary Vince Cable and Energy Secretary Ed Davey published a long-term strategy to back the industry during a visit to Aberdeen.

Speaking to an audience of oil and gas executives, they said an independent Scotland would struggle to absorb the costs of supporting the industry, which include tax breaks for exploration and scrapping old rigs.

The claims came as a consortium of oil companies led by BP announced a GBP 330 million drilling program that could lead to further development of the giant Clair field in the Atlantic, west of Shetland.

Mr. Cable said oil and gas would continue to provide 70% of Britain's energy needs into the 2040s. He said the UK Government would provide tax certainty, supply chain support and skills development as part of its long-term plan.

Dismissing the SNP s drive for independence, he said: "A bigger country is better at absorbing shocks it's simple logic. A modest change has a significant impact on GDP. In a country 10 times smaller, the shock would be proportionally bigger."

Mr. Davey said: "Only the UK can deliver what is required over a sustained period if you are going to get the most out of the oil and gas industry. The UK is a large economy that is why we can provide the support. Smaller economies have difficulty absorbing the costs."

The SNP has put oil at the heart of its case for independence. First Minister Alex Salmond insists Scotland is on the cusp of a second oil boom, though the claim was dismissed by a think-tank earlier this week.

Fergus Ewing, Scottish Energy Minister, said: " I am delighted the UK Government is following the Scottish Government s lead in recognizing the importance of the industry by launching its own oil and gas strategy.

"It highlights the positive future of the industry, the extent of reserves, and the benefit to the balance of payments and production taxes. I welcome the view there will be a long-term future for the oil and gas industry well beyond 2055."

Meanwhile the BP-led consortium including Shell, Conoco-Phillips and Chevron said drilling had already begun on the first of five wells planned over the next two years at Clair.

Up to 12 wells could be drilled, depending on initial results.

The field, holding eight billion barrels, was discovered 35 years ago but production only started in 2005 owing to the difficulty of extracting and bringing the oil ashore.

BP North Sea regional president Trevor Garlick said: "This is a major milestone and a further big commitment to the west of Shetland by BP and its co-venturers. If successful, the appraisal program could pave the way for a third phase of development at Clair. This is now a real possibility."

Copyright 2013 Newsquest Media Group All Rights Reserved

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Lightning Eliminators Seeks to Reduce Lightning Strikes

Lightning Eliminators Seeks to Reduce Lightning Strikes

Boulder, Colo.-based Lightning Eliminators & Consultants (LEC) offers technology that can protect oil and gas assets from the threat of lightning strikes.

Lightning strikes have become a growing problem as the rate, frequency and strength of lightning strikes are increasing, LEC CEO Avram Saunders told Rigzone in an interview. Lightning strikes are also occurring more often in areas that historically have not experienced a large number of lightning strikes, noted Saunders, who attributed the upswing in lighting strikes to changes in global weather patterns.

In 2009, the National Lightning Safety Institute reported that lightning damage and related losses exceeded $5 billion. According to reports from Lloyds and the Insurance Information Institute, lightning-related losses rose 15 percent from 2009 to 2010.

Lightning Eliminators Seeks to Reduce Lightning StrikesTank explosion at Magellan Midstream Partners distribution terminal, Kansas City, Kansas – June 3, 2008

"Lightning is beautiful, dangerous and more complex than we think," Saunders commented.

This process can include cloud to ground – the most studied and understood form of lightning – as well as intracloud and cloud to cloud.

For over two centuries, the lightning rod has served as the primary means of protecting assets from lightning after Benjamin Franklin invented it as a solution to preventing house fires in the 18th century. Lightning became more of a threat as the heights of buildings rose. However, attracting lightning is not something that owners of multi-billion dollar oil and gas facilities want. Instead, LEC uses charge transfer technology to prevent direct strikes by lightning to protect energy assets, whose electronic components can be knocked out by lightning in the blink of an eye, said Saunders.

Former Rockwall and NASA engineer Roy B. Carpenter founded the predecessor company to LEC over 40 years ago to study and apply engineering principles to lightning strike problems and design a lightning strike prevention system based on physics. This system would also take into account the scientific study of point-discharge rather than observation or guesswork, which had guided the lightning protection community for over two centuries.

Point discharge is the process in which a sharp point immersed in an electrostatic field transfers charge from the ionizer into the air. Ionized air molecules form a mixture of charged and uncharged molecules known as space charge, which forms a shield between the storm cell and the site. The difference in the electrical power between the protected site and the storm clouds is reduced, delaying the formation of an upward streamer from the protected site and preventing direct strikes.

Carpenter, who worked as chief engineer for NASA's Apollo Moon Landing Missions and the Space Shuttle design engineering teams, decided to pursue technology to protect against lightning strikes because of the large and frequent problems he had seen with lightning strikes at Cape Canaveral.

The result of this research is the charge transfer system (CTS) – which LEC calls the Dissipation Array System (DAS) – which is intended to prevent a lightning strike from occurring within a protected zone or area. The system prevents lightning strikes by collecting the induced charge developed by thunderstorm clouds from a protected area of the earth and transfers this charge through the ionizer into the surrounding air.

LEC's solution utilizes basic principles of physics in which a zone of protection is created from the highest point of a facility down to the earth. For example, a facility that stands 50 feet in height would have a protection zone 200 feet wide around the facility, Saunders commented.

Protection against lightning involves three parts – direct strike protection, surge protection and grounding. LEC prides itself on being able to provide consulting, design and implementation services for lightning protection, said Saunders. The company offers custom solutions, based on a clients' need and risk tolerance, as lightning protection involves more than a cookie cutter approach. Maximum ionization is achieved through point spacing, length and the number and geometry of points.

The CTS involves one or more ionizers, down conductor, and charge collector. The latter is an interconnected system of grounding electrodes and conductor designed to collect and funnel electrical charge to the ionizers. The down provides the electrical connection between the charge collection and the ionizers, which provide a means for point discharge to take place.

The charges transferred to the air can act in one of two modes – collection, which establishes a preferred conductive path for the lightning leader, and prevention mode, which reduces the electric field intensity to the level that delays the formation of an upward streamer from the protected area.

LEC's Spline Ball Ionizers (SBI) are multi-point ionizers that can be deployed with the DAS to function in prevention mode. SBIs can be deployed without DAS in multiple units to function in collection mode, and are normally mounted in groups on elevated structures. Splint Ball Terminals are multi-point ionizers that that can be deployed with a DAS for use in collection mode, and are designed for placement on roofs and roof projections subject to a direct lightning strike.

Lightning Eliminators Seeks to Reduce Lightning StrikesLightning strikes at the Luxor and Excalibur in Las Vegas, September 2011

The company's technology has been used to protect assets in the upstream and downstream oil and gas industry, as well as across multiple industries – petrochemical, power generation, biochemical, chemical manufacturing, information technologies, nuclear energy, mining, utilities, and manufacturing. LEC has provided services for onshore and offshore facilities in Nigeria, Thailand, Singapore, southern Africa and Australia.

The company has had a 20-year business relationship with U.S.-based FedEx. However, LEC has had more success connecting with oil and gas companies overseas compared with the United States, perhaps because oil and gas companies prefer a traditional approach to managing lightning risk.

The company is working on cracking the offshore market and changing its status from a "best-kept secret" in the U.S. offshore oil and gas industry. The company's business has grown over the past several years, but business outside the United States has represented the lion's share of LEC's business growth. From 2010 to 2012, LEC experienced 183 percent export growth, and increased the number of countries in which it is doing business to 70.

The company has seen its business grow in countries such as Qatar. While lightning strikes are not as much of an issue in the Middle East, companies in Qatar are investing in technology to protect against lightning, not only meeting standards but exceeding them. In Qatar, the challenge for LEC has been installing the equipment on offshore facilities without disturbing the patterns of helicopter flights.

Offshore rigs and platforms are thought of as "grounded" to the ocean. However, the environment and even the facility's design could lead to a compromise in bonding with rust and oil deposits that impeded the energy's path to the ground. This leaves the advanced electrical and electronic systems and personnel vulnerable to damage not only on from direct strikes but surges as well.

However, lightning does present an issue for the Gulf of Mexico, and the growing emphasis on safety following the 2010 Macondo incident has created a new openness in the industry to new ideas, Saunders noted. To address the risk of lightning to offshore oil and gas facilities, LEC has been working with drilling rig contractor Transocean Ltd., with whom LEC connected through Transocean's operations in Aberdeen. Chevron Corp., Exxon Mobil Corp. and BP plc have also turned to LEC to address the issue.

Last year, solutions for nearly a dozen companies' offshore platforms and rigs were produced following vulnerability studies conducted by LEC that were based on International Electrotechnical Commission and National Fire Protection Association guidelines and standards. Many of these solutions included LEC's DAS system, according to a February 2013 report by LEC.

From the standpoint of electronics, the secondary effects of lightning -- earth current transients and atmospheric transients, ground potential rise and electromagnetic pulse -- are a greater problem than the direct lightning strike. And in some cases, the damage caused by lightning may not show up immediately after a storm, but some time later, Saunders commented.

"With every upgrade in technology, sensitive systems like dynamic positioning, drilling instrumentation and control and other rig management systems essential to staying online are becoming more vulnerable," LEC said in a February 2013 report.

Calculating the mean-time-between-failure for sensitive systems is more difficult than determining the dollars lost through obvious damage and downtime. Costs could range between $20,000 and $60,000 per hour or more when a system is down; these costs do not include the replacement costs of the equipment affected.

Protecting assets from lightning strikes has become even more critical in a weak economy, when companies may have mothballed some plants and are not operating at full efficiency. Operating with fewer assets means the protection of having redundant facilities goes away, Saunders commented, leaving assets that are operating more vulnerable to damage from lightning strikes. In the case of Transocean, the company's sale of its jackup fleet and shift towards ultra-deepwater drilling means the company's need to protect its ultra-deepwater drilling fleet is greater.

LEC's lightning protection program is also being utilized in the U.S. onshore feature. Ashley Automation, which specializes in onsite electrical, measurement, control, and telemetry installation and maintenance, offers construction services for hydraulic fracturing salt water disposal facilities, and also provides pump and motor controls, tank levels and grounding systems and communications systems installation. These facilities can suffer lightning damage or burn down completely due to lightning strikes, as the fiberoptic tanks used to store waste saltwater that comes from hydraulic fracturing attract lightning.

Ashley works hand in hand with LEC to install LEC's lightning protection equipment. LEC's products are the only product that Ashley installs as far as lightning protection, said Matt Jones, project manager with Ashley. Back when Barnett shale activity first started, lightning storms would blow through and strike facilities. Given that saltwater waste facilities cost $5 million, oil and gas companies can't afford to take a lightning strike.

Lightning Eliminators Seeks to Reduce Lightning StrikesFire at Greensboro No. 2 Tank Farm, Greensboro, N.C., June 13, 2010

LEC's confidence in its product prompted the company to extend a full no-strike warranty to each and every client who buys a system and recertifies it each year. The charge transfer system's reliability stands at 99.87 percent, with more than 60,000 systems of data on approximately 3,500 systems. Additionally, Hitachi is in the process of testing LEC's technology and effectiveness at a facility in Singapore.

Saunders cites the case of the Browns Ferry Nuclear Power plant, the first nuclear power plant constructed by the Tennessee Valley Authority (TVA), as evidence that LEC's technology works. While the nuclear facility in 2006 helped TVA achieve a 99.99 percent operational reliability for the fifth year in a row, lightning strikes to the facility's off-gas stack were hampering reliability. As a result, no known lightning strikes to the off-gas stack have been reported in nearly a decade.

A comparison of data on lightning activity around the off-gas stack in three years before and after the implementation of the DAS system – including the number and location within 1,640 feet (500 meters), 3, 6and 10 mile radius circles around the off-gas stack. The review found the implementation of DAS reduced by 80 percent the lightning strikes that occurred within 1,640 feet (500 meters) of the off-gas stack. The weighted data for strikes in the wider areas showed no change of statistical significance, though lightning frequency grew by nearly 63 percent in the 10 miles radius around the stack in the time after the DAS was implemented.

Saunders believes the results indicate the company "knows what it is doing".

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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EnerMech Scores Work for BG Group's North Sea Fields

Mechanical engineering services company, EnerMech, has been awarded a process services contract by BG Group which could be worth up to $24 million (GBP 16 million).

The three year contract (+1 year option) covers all BG Group's UK North Sea assets including the Lomond, North Everest and Armada platforms.

The workscope includes the provision of topside process, flange management and nitrogen services and is the first contract EnerMech has secured with BG Group.

Aberdeen-based EnerMech said the contract win will create new jobs and take its total workforce to more than 1,400.

EnerMech's director of Process, Pipeline & Umbilicals, Les Graves, said: "We are looking forward to assisting BG Group in supporting their assets in the North Sea and this award reaffirms our position as a major supplier of process services to the oil and gas sector."

In January EnerMech acquired Australian valves engineering and servicing company, Valve Tech Engineering, in a multi-million pound deal which followed the acquisition in December of Cape Town based Water Weights International SA (Pty) Ltd which specializes in heavy load testing of cranes and lifting equipment.

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Quicksilver, Tokyo Gas Join Forces in Barnett Shale Play

Quicksilver, Tokyo Gas Join Forces in Barnett Shale Play

Quicksilver Resources, a natural gas producer is selling a 25-percent stake in its Barnett Shale oil and gas assets to TG Barnett Resources LP (TGBR), a subsidiary of Tokyo Gas Co. for $485 million.

Quicksilver will remain as operator of the assets which are located in Texas. The company holds about 130,000 net acres within the Barnett Shale formation in the Fort Worth basin of north Texas. The assets currently produce about 275 million cubic feet per day of shale gas and natural gas liquids marketed in the United States.

The effective date of the transaction is Sept. 1, 2012 and closing is expected to occur April 30, which is subject to customary closing conditions. The company said it will use the proceeds to lower debt.

"We are very pleased to have Tokyo Gas as a partner to develop the full potential of our Barnett Shale asset base," said Glenn Darden, Quicksilver's president and CEO, in a released statement. "We look forward to a successful long-term relationship, which will benefit both of our companies."

This transaction is the first time for Tokyo Gas to participate in the shale gas development in the United States. TGBR's share of gas production will be marketed in the United States, and is forecasted to be some 0.35 to 0.5 million tons per annum in terms of LNG volume.

Tokyo Gas said it will "continue to work intensively for participation in the overseas business with a view to diversification and expansion of its upstream business as well as establishment of LNG value chain," in a released statement.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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New Energy Minister Faces Australian Cost Challenge

Gary Gray, a former Woodside Petroleum Ltd. corporate affairs chief, has been named Australia's new Minister for Resources and Energy following a cabinet reshuffle of the country's governing Labor Party.

The West Australian replaces Martin Ferguson in the role.

Industry bodies have welcomed Gray to the position, but warned he would be challenged by Australia's ongoing issue of the rising cost of doing business in the country.

The Australian Petroleum Production and Exploration Association (APPEA) believed Gray's appointment, while a positive move for the industry, came at a crucial time in its history.

David Byers, APPEA chief executive, said the industry was presently investing $208 billion (AUD $200 billion) in new projects, including seven major liquefied natural gas (LNG) ventures.

He added the industry was at a turning point, with numerous new projects on the drawing board, but not yet committed.

"Australian oil and gas project costs are among the highest in the world and there are several critical policy areas that require genuine reform if hurdles that currently hinder the local industry's ability to compete internationally are to be removed," he said.

"Most important of these is the need for a stable, predictable and competitive taxation regime that encourages exploration and development investments.

"The oil and gas industry's long-term projects need long-term stability. Yet over the past five years the industry has been confronted with a range of disruptive changes to the taxation regime, affecting the company and resources taxation settings."

The Chamber of Minerals and Energy of Western Australia (CME) also applauded Gray's appointment to the portfolio.

Reg Howard-Smith, CME chief executive officer, said it was good news the important portfolio had been given to a Western Australian, given the state's resources sector accounted for 46 percent of Australia's export income.

"Policy initiatives that focus on reducing costs, duplication and red tape will deliver ongoing economic benefits to all Western Australians," Howard-Smith said.

"Unfortunately we are becoming a less attractive place to develop resources projects when compared with global resource rich nations and investment may be driven to other lower cost regions because of additional layers of taxation and charges, which are continuing to drive up cost for doing business."

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FT: Indonesia Protested to China Over Passports Last Year

Indonesia's foreign minister has said that the Southeast Asian nation protested to China about a controversial map printed in Chinese passports last year which claimed almost all of the South China Sea, the Financial Times reported Friday on its website.

Beijing has become increasingly assertive in its claims over large swathes of the South China Sea, including islands and shoals which are also claimed by several Asean members and Taiwan. The controversial "nine-dash line" printed in its passports represents the extent of China's claim over South China Sea in a map it submitted to the U.N.

Indonesia hadn't issued a public statement that time, even though the nine-dash line cuts through its so-called Exclusive Economic Zone in the gas-rich Natuna Sea, where companies including ExxonMobil Corp. and Total SA operate, the FT report said.

However, Indonesia's foreign minister Marty Natalegawa said they did in fact protest to Beijing "several weeks" after the new passports were issued, and had sent a diplomatic note to the Chinese embassy in Jakarta, according to the FT.

"We exercised nice low key diplomacy but getting our point across," Mr. Natalegawa said in the report.

Click here to view the full report

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

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SBM: Large Payments were made in Corruption Probe

Dutch oilfield services firm SBM Offshore said Thursday that an internal investigation into potentially improper sales practices in Africa has confirmed that substantial payments were made to government officials. The firm added that the investigation – which has been carried out by outside legal counsel and forensic accountants since it was first announced April 10 2012 – is expected to be completed during 2013.

The investigation is into alleged payments involving sales intermediaries in certain African countries during the period 2007 to 2011. The investigation is trying to determine whether these alleged payments violated anti-corruption laws.

Although SBM said that it could not make any definitive statements regarding the findings of the investigation so far, it said that initial feedback received to date indicates that substantial payments were made, mostly through intermediaries, which appear to have been intended for government officials.

The alleged payments came to the attention of SBM's management board after a review of its compliance procedures in late 2011. In the course of the investigation allegations were made of improper payments in countries outside Africa but to date no conclusive proof of such allegations has been established, the firm added.

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PEDEVCO Finalizes Acreage in Mississippian Lime

PEDEVCO Corp. (dba Pacific Energy Development), an energy company focusing on shale oil and gas development and production in the United States and Pacific Rim countries, announced the closing of its acquisition of a 97 percent operated working interest in 7,006 gross (6,763 net) acres in a shale oil asset (the Mississippian asset) located in the Mississippian Lime formation in Comanche, Harper, Barber and Kiowa Counties, Kansas. The Company operates the asset and plans to commence drilling operations in the second quarter of 2013.

Commenting on the transaction, President and CEO Frank Ingriselli noted, "This newly acquired strategic acreage in the Mississippian formation establishes our presence in one of the most significant resources plays in America and triples our existing net acreage position. We look forward to commencing our drilling program on our Mississippian asset which we anticipate will provide a further platform for our organic growth."

Pacific Energy Development also recently announced the results of initial production from its second and third wells, the Logan 2H and Waves 1H, from its Niobrara asset located in Weld County, Colorado.

Riviera-Ensley Energy Advisors served as the principal advisor for this Mississippian asset transaction.

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SBM: Large Payments were made in Corruption Probe

Dutch oilfield services firm SBM Offshore said Thursday that an internal investigation into potentially improper sales practices in Africa has confirmed that substantial payments were made to government officials. The firm added that the investigation – which has been carried out by outside legal counsel and forensic accountants since it was first announced April 10 2012 – is expected to be completed during 2013.

The investigation is into alleged payments involving sales intermediaries in certain African countries during the period 2007 to 2011. The investigation is trying to determine whether these alleged payments violated anti-corruption laws.

Although SBM said that it could not make any definitive statements regarding the findings of the investigation so far, it said that initial feedback received to date indicates that substantial payments were made, mostly through intermediaries, which appear to have been intended for government officials.

The alleged payments came to the attention of SBM's management board after a review of its compliance procedures in late 2011. In the course of the investigation allegations were made of improper payments in countries outside Africa but to date no conclusive proof of such allegations has been established, the firm added.

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