Contractors Feast on Australian Projects

Australia's major resources services contractors targeting the local oil and gas sector are taking advantage of the rapid growth being experienced in the industry.

Major new developments around the country continue to provide a wide range of opportunities for contractors such as Monadelphous, Leighton Contractors, Clough Ltd. and Laing O'Rourke.

Chevron's Gorgon and Wheatstone LNG projects, the Woodside Petroleum Ltd.-operated North West Shelf project, the Browse LNG project joint venture and Royal Dutch Shell plc's Floating LNG project have created a surge in demand in Western Australia for high-scale contracting services.

In Queensland, developments include QGC Pty. Ltd.'s Curtis LNG project, Arrow Energy Ltd.'s LNG plant project, the Australian Pacific LNG joint venture and Santos Ltd.'s Gladstone LNG project, while in the Northern Territory, Inpex Corp. has started development on the Ichthys project.

Monadelphous has experienced a strong run of contract wins on both sides of Australia around these developments, helping the company deliver record revenue and profits.

The Perth-based company has already won almost $1.04 billion (AUD 1 billion) in new contracts or contract extensions this Australian financial year, with a large percentage of those awards in the oil and gas sector.

In particular, Monadelphous has added strength to its positioning as a leading maintenance services provider in the oil and gas market, where it has recently secured two significant LNG contracts.

"With the award of these new contracts Monadelphous is providing long-term maintenance services to all of Australia's existing on-shore LNG plants," Rob Velletri, Monadelphous managing director, said in a conference call.

"The new long-term maintenance and shut-down services contract with Woodside at the Karratha gas plant in WA, the largest onshore LNG plant in Australia, is a strategic milestone for the company.

"Monadelphous also entered into its first long-term LNG maintenance services contract with QGC for its new LNG plant."

In October 2012, the company was awarded the maintenance contract, worth about $156 million (AUD 150 million), at the Karratha gas plant.

The contract, which started in January for an initial term of three years with the option of two one-year extensions, involves the provision of maintenance and shutdown services.

Monadelphous's contract with coal seam gas company QGC at the Curtis LNG plant, worth $83 million (AUD 80 million), started in January for an initial 6.5-year term.

The company will provide multidisciplinary core maintenance and shutdown services to support the operations phase of the plant, currently under construction at Curtis Island.

Monadelphous has also consolidated its relationship with Chevron Australia after signing a one-year extension to its facilities management services contract at the Gorgon project.

Worth about $135 million (AUD 130 million), the contract is for the operation and maintenance of construction facilities and utilities on Barrow Island.

Leighton Contractors' involvement with Australia's major developments has grown through a series of related contracts won at INPEX's Ichthys project.

In January, Leighton, which holds an oil and gas contract portfolio worth in excess of $4.68 billion (AUD 4.5 billion), was awarded a $960 million (AUD 923 million) contract to undertake Ichthys' onshore LNG facilities main civil works.

The project involves delivering the main civil infrastructure required for the LNG facilities, including piling, foundations, trenching for pipes, cable, sewers and drainage, roads, paving, electrical and instrumentation cabling.

This win added to Leighton Contractors' services division being awarded a four-year, $291 million (AUD 280 million) operations and maintenance contract by JKC Australia for the Ichthys temporary site facilities.

In October 2012, Leighton Contractors was also awarded a $131-million (AUD 126-million) engineering, procurement and construction (EPC) contract by JKC for one of the building packages at Ichthys.

At the Chevron Corp.-operated Gorgon project, the value of Leighton Contractors' contract to deliver the civil and underground works package was increased by $1 billion (AUD 975 million) to an estimated value of $1.86 billion (AUD 1.789 billion).

Leighton said the new estimated value reflected an increased and amended scope of works to provide better flexibility to deliver the package in a more efficient and timely way.

Perth-based Clough has grown its portfolio of oil and gas contracts to more than 20 this financial year.

Clough's energy portfolio across Australia features Chevron's Gorgon and Wheatstone projects, INPEX's Ichthys, Santos' Gladstone and QGC's Curtis.

The company's contract wins include an extension worth more than $20.8 million (AUD 20 million) for its Clough AMEC joint venture for the provision of engineering services to Chevron's oil facilities off the north-west of Australia, and a contract for its joint venture with Transfield Services for construction work as part of QGC's Curtis project.

Kevin Gallagher, Clough chief executive officer and managing director, said the company's outlook had never been stronger with a record order book and strong tender pipeline.

He explained that Clough's oil and gas clients were searching for contractors that could provide enhanced productivity.

"Clough is responding with a number of productivity initiatives," Gallagher said in a conference call.

"Our aim is to set the benchmark for productivity - we aim to do this by establishing the metrics and systems to provide real-time reporting on productivity performance and enable early detection and intervention where we have productivity issues."

Laing O'Rourke, a Perth-based privately-own engineering company, secured a major structural engineering and civil works contract with Bechtel Corp. on the Chevron-operated Wheatstone project.

The company said it would provide more than $520 million (AUD 500 million) in civil structural engineering and construction with the contract.

Wheatstone, situated 7.5 miles (12 kilometers) west of Onslow in the Pilbara region, will consist of two LNG trains with a combined capacity of 8.9 million tonnes per annum and a domestic gas plant.

David Stewart, Laing O'Rourke chief executive officer, said the company was "engaged on almost every one of Australia's major oil and gas projects – and can provide self delivered, construction and engineering services at each link of the gas export chain".

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.

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Contractors Feast on Australian Projects

Australia's major resources services contractors targeting the local oil and gas sector are taking advantage of the rapid growth being experienced in the industry.

Major new developments around the country continue to provide a wide range of opportunities for contractors such as Monadelphous, Leighton Contractors, Clough Ltd. and Laing O'Rourke.

Chevron's Gorgon and Wheatstone LNG projects, the Woodside Petroleum Ltd.-operated North West Shelf project, the Browse LNG project joint venture and Royal Dutch Shell plc's Floating LNG project have created a surge in demand in Western Australia for high-scale contracting services.

In Queensland, developments include QGC Pty. Ltd.'s Curtis LNG project, Arrow Energy Ltd.'s LNG plant project, the Australian Pacific LNG joint venture and Santos Ltd.'s Gladstone LNG project, while in the Northern Territory, Inpex Corp. has started development on the Ichthys project.

Monadelphous has experienced a strong run of contract wins on both sides of Australia around these developments, helping the company deliver record revenue and profits.

The Perth-based company has already won almost $1.04 billion (AUD 1 billion) in new contracts or contract extensions this Australian financial year, with a large percentage of those awards in the oil and gas sector.

In particular, Monadelphous has added strength to its positioning as a leading maintenance services provider in the oil and gas market, where it has recently secured two significant LNG contracts.

"With the award of these new contracts Monadelphous is providing long-term maintenance services to all of Australia's existing on-shore LNG plants," Rob Velletri, Monadelphous managing director, said in a conference call.

"The new long-term maintenance and shut-down services contract with Woodside at the Karratha gas plant in WA, the largest onshore LNG plant in Australia, is a strategic milestone for the company.

"Monadelphous also entered into its first long-term LNG maintenance services contract with QGC for its new LNG plant."

In October 2012, the company was awarded the maintenance contract, worth about $156 million (AUD 150 million), at the Karratha gas plant.

The contract, which started in January for an initial term of three years with the option of two one-year extensions, involves the provision of maintenance and shutdown services.

Monadelphous's contract with coal seam gas company QGC at the Curtis LNG plant, worth $83 million (AUD 80 million), started in January for an initial 6.5-year term.

The company will provide multidisciplinary core maintenance and shutdown services to support the operations phase of the plant, currently under construction at Curtis Island.

Monadelphous has also consolidated its relationship with Chevron Australia after signing a one-year extension to its facilities management services contract at the Gorgon project.

Worth about $135 million (AUD 130 million), the contract is for the operation and maintenance of construction facilities and utilities on Barrow Island.

Leighton Contractors' involvement with Australia's major developments has grown through a series of related contracts won at INPEX's Ichthys project.

In January, Leighton, which holds an oil and gas contract portfolio worth in excess of $4.68 billion (AUD 4.5 billion), was awarded a $960 million (AUD 923 million) contract to undertake Ichthys' onshore LNG facilities main civil works.

The project involves delivering the main civil infrastructure required for the LNG facilities, including piling, foundations, trenching for pipes, cable, sewers and drainage, roads, paving, electrical and instrumentation cabling.

This win added to Leighton Contractors' services division being awarded a four-year, $291 million (AUD 280 million) operations and maintenance contract by JKC Australia for the Ichthys temporary site facilities.

In October 2012, Leighton Contractors was also awarded a $131-million (AUD 126-million) engineering, procurement and construction (EPC) contract by JKC for one of the building packages at Ichthys.

At the Chevron Corp.-operated Gorgon project, the value of Leighton Contractors' contract to deliver the civil and underground works package was increased by $1 billion (AUD 975 million) to an estimated value of $1.86 billion (AUD 1.789 billion).

Leighton said the new estimated value reflected an increased and amended scope of works to provide better flexibility to deliver the package in a more efficient and timely way.

Perth-based Clough has grown its portfolio of oil and gas contracts to more than 20 this financial year.

Clough's energy portfolio across Australia features Chevron's Gorgon and Wheatstone projects, INPEX's Ichthys, Santos' Gladstone and QGC's Curtis.

The company's contract wins include an extension worth more than $20.8 million (AUD 20 million) for its Clough AMEC joint venture for the provision of engineering services to Chevron's oil facilities off the north-west of Australia, and a contract for its joint venture with Transfield Services for construction work as part of QGC's Curtis project.

Kevin Gallagher, Clough chief executive officer and managing director, said the company's outlook had never been stronger with a record order book and strong tender pipeline.

He explained that Clough's oil and gas clients were searching for contractors that could provide enhanced productivity.

"Clough is responding with a number of productivity initiatives," Gallagher said in a conference call.

"Our aim is to set the benchmark for productivity - we aim to do this by establishing the metrics and systems to provide real-time reporting on productivity performance and enable early detection and intervention where we have productivity issues."

Laing O'Rourke, a Perth-based privately-own engineering company, secured a major structural engineering and civil works contract with Bechtel Corp. on the Chevron-operated Wheatstone project.

The company said it would provide more than $520 million (AUD 500 million) in civil structural engineering and construction with the contract.

Wheatstone, situated 7.5 miles (12 kilometers) west of Onslow in the Pilbara region, will consist of two LNG trains with a combined capacity of 8.9 million tonnes per annum and a domestic gas plant.

David Stewart, Laing O'Rourke chief executive officer, said the company was "engaged on almost every one of Australia's major oil and gas projects – and can provide self delivered, construction and engineering services at each link of the gas export chain".

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

State Department Inspector General Probing Keystone XL Contractor’s Conflicts of Interest

In yet another investigation into the Obama Administration’s activities, the State Department Inspector General is probing the conflicts of interest surrounding the contractor that performed the Keystone XL review,.

The American public was supposed to get an honest look at the impacts of the Keystone XL pipeline. Instead, Environmental Resources Management (ERM), a fossil fuel contractor, hid its ties from the State Department so they could green light the project on behalf of its oil company clients.

Hiring an oil company contractor to review an oil pipeline that its clients have a financial interest in should be illegal – and it is. The Federal Government has strict laws to avoid conflicts of interest and prevent the hiring of contractors who cannot provide unbiased services.

Unredacted documents from the contractor’s proposal (revealed by Mother Jones) show that the company had worked for TransCanada, ExxonMobil and other fossil fuel companies that have a stake in the Canadian Tar Sands.

But, ERM misled the State Department at least twice in its proposal (see C&BP’s original post on ERM’s conflicts of interest)– which may have led to its selection by the State Department to review the Keystone XL pipeline.

First, ERM answered “No” to the question “Within the past three years, have you (or your organization) had a direct or indirect relationship (financial, organizational, contractual or otherwise) with any business entity that could be affected in any way by the proposed work?“ ERM appears to have added to the Yes/No questionnaire that, “ERM has no existing contract or working relationship with TransCanada.” Regardless of the addendum, the oil company contractor misled the State Department by checking “No” to the specific question above. Despite the fact that unredacted documents show that ERM worked for TransCanada and other fossil fuel companies with a stake in Keystone XL pipeline in the three years prior to its proposal.

Second, ERM claimed it was not an energy interest. The State Department question defines an energy interest in part as any company or person engaged in research related to energy development. Yet, ERM has worked for all of the top five oil companies and dozens of other fossil fuel companies. In other words, ERM is clearly an energy interest.

How can we trust ERM to perform an honest review of the Keystone XL pipeline, if it can’t answer a yes/no question honestly?

These misleading statements should have been flagged by the State Department and the contractor should not have been able to perform the review because of these seeming conflicts of interest.

Because of the issues above, Checks & Balances Project (C&BP) and 11 environmental, faith-based and public interest organizations sent a letter  [.PDF] on April 8, 2013, calling on Secretary of State John Kerry and the State Department Deputy Inspector General Harold Geisel to investigate two things: first, whether ERM hid conflicts of interest which might have excluded it from performing the Keystone XL environmental assessment and second, how State Department officials failed to flag inconsistencies in ERM’s proposal.

A few weeks later, C&BP received a voicemail from a Special Agent at the State Department’s Office of Inspector General (OIG):

Hello Mr. Elsner, my name is Special Agent Pedro Colon from the State Department’s Office of Inspector General.  I’m calling to inform you that we have received your request and are reviewing the matter.  If you have any questions please contact me at 703-284-2688.

On May 7, 2013, I called Special Agent Colon but he was unable to speak at the time. I followed up the next day and spoke with the Special Agent via phone regarding the request for an investigation. I asked a few basic questions about the status of the complaint and asked specifically if C&BP would be informed should the complaint be fully investigated by the Office of Inspector General (OIG). Special Agent Colon informed me that he could not speak to any of the questions and referred us to other staff in the OIG.

On May 9, 2013, I received an email from the OIG General Counsel saying, “that the complaint was being processed per the OIG hotline procedures and is under review.” (See the entire email correspondence here [.PDF])

I then asked the OIG General Counsel the same question he asked Mr. Colon:

If the hotline is moved out of the review process and onto the next step (an investigation?), will I be notified?

The OIG  replied via email saying that the OIG Office of Investigations will not comment if it is engaged in an investigation.

The correspondence between C&BP and the OIG indicates that there is a probe into the Keystone XL review conflicts of interest.

The public was supposed to get an honest look at the impacts of the Keystone XL pipeline. Instead, ERM, an oil company contractor, misled the State Department, in what appears to be an attempt to green light the project on behalf of oil industry clients.

The American Public needs a full investigation into the conflicts of interest and misleading statements of the Keystone XL review contractor, Environmental Resources Management.

Secretary Kerry needs to stop the Keystone XL process until the Inspector General completes a full investigation of these conflicts of interest and the State Department has an unbiased review of Keystone XL’s impact.

Filed under KeystoneXL Tagged with Big Oil, Checks and Balances Project, Energy, Energy Production, Environment, ExxonMobil, John Kerry, Keystone, Keystone XL, politics, Secretary Kerry, State Department, Tar Sands, TransCanada, US State Department

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BSEE Cites GOM Contractors for Violations

The Bureau of Safety Environmental Enforcement (BSEE) issued over a two-week period six Incidents of Noncompliance (INCs) to four offshore contractors working in the Gulf of Mexico for violations of federal regulations related to oil and gas operations.

ENSCO Drilling, Nabors Offshore Corporation, Alliance Oilfield Services, Island Operators Co. Inc. and ERT GOM Inc. are among the companies that were issued INCs by BSEE from early February to early March. The contractors have 60 days to appeal the INCs, BSEE said in a March 15 statement. The violations will be reviewed for possible civil penalty statements.

ENSCO was issued an INC for operating for at least seven days with a faulty blowout preventer control system and did not cease well operations during this period as required. Nabors was cited after a worker was seriously injured due to personnel's failure to determine whether an electricity source was on or off before an attempt to place a 30-amp plug into a receptacle. The BSEE inspector also found personnel were not wearing proper protective attire.

A civil penalty of up to $40,000 per violation per day can be assessed if the operator fails to correct the violation in the reasonable amount of time specified on the INC, or the violation resulted in a threat of serious harm or damage to human life or the environment, according to BSEE's website.

The INCs issued are part of BSEE's crackdown on contractors operating on the Outer Continental Shelf following the April 2010 Deepwater Horizon incident. BSEE first exercised its authority to issue an INC to a contractor in October 2011 when Transocean and Halliburton received INCs related to Deepwater Horizon.

"While the primary focus of BSEE's enforcement actions will continue to be on lessees and operators, BSEE will, in appropriate circumstances, issue incidents of noncompliance to contractors for serious violations of BSEE regulations," BSEE said Aug. 15, 2012, when it issued its Interim Policy Document on issuing INCs to contractors working on the OCS. "The issuance of an INC to a contractor does not relieve the lessees from liability. In fact, in instances in which INCs are issued to a
contractor, INCs will also be issued to the lessee or operator."

The violations cited in an INC must be corrected within 14 days or a plan of corrective action has to be submitted. In the case of an accident or a one-time event where the conditions of the violation no longer exist, the contractors are being asked to document how the violation took place and what is being done to prevent its reoccurrence.

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

BSEE Cites GOM Contractors for Violations

The Bureau of Safety Environmental Enforcement (BSEE) issued over a two-week period six Incidents of Noncompliance (INCs) to four offshore contractors working in the Gulf of Mexico for violations of federal regulations related to oil and gas operations.

ENSCO Drilling, Nabors Offshore Corporation, Alliance Oilfield Services, Island Operators Co. Inc. and ERT GOM Inc. are among the companies that were issued INCs by BSEE from early February to early March. The contractors have 60 days to appeal the INCs, BSEE said in a March 15 statement. The violations will be reviewed for possible civil penalty statements.

ENSCO was issued an INC for operating for at least seven days with a faulty blowout preventer control system and did not cease well operations during this period as required. Nabors was cited after a worker was seriously injured due to personnel's failure to determine whether an electricity source was on or off before an attempt to place a 30-amp plug into a receptacle. The BSEE inspector also found personnel were not wearing proper protective attire.

A civil penalty of up to $40,000 per violation per day can be assessed if the operator fails to correct the violation in the reasonable amount of time specified on the INC, or the violation resulted in a threat of serious harm or damage to human life or the environment, according to BSEE's website.

The INCs issued are part of BSEE's crackdown on contractors operating on the Outer Continental Shelf following the April 2010 Deepwater Horizon incident. BSEE first exercised its authority to issue an INC to a contractor in October 2011 when Transocean and Halliburton received INCs related to Deepwater Horizon.

"While the primary focus of BSEE's enforcement actions will continue to be on lessees and operators, BSEE will, in appropriate circumstances, issue incidents of noncompliance to contractors for serious violations of BSEE regulations," BSEE said Aug. 15, 2012, when it issued its Interim Policy Document on issuing INCs to contractors working on the OCS. "The issuance of an INC to a contractor does not relieve the lessees from liability. In fact, in instances in which INCs are issued to a
contractor, INCs will also be issued to the lessee or operator."

The violations cited in an INC must be corrected within 14 days or a plan of corrective action has to be submitted. In the case of an accident or a one-time event where the conditions of the violation no longer exist, the contractors are being asked to document how the violation took place and what is being done to prevent its reoccurrence.

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