Aker Solutions teams up with oil majors in subsea gas separation JIP

Norwegian oilfield services company Aker Solutions and a group of oil and gas operators have come together in a joint industry project with the aim of making subsea gas separation a reality.

Source: Aker Solutions

Using CO2 injection to increase recovery rates in offshore oil and gas fields can improve the economics of a field significantly, but so far, the separation of ‘back-produced’ CO2 from the well-stream has been considered carried out on an existing platform, adding cost and making the concept economically unattractive.

Now, Aker Solutions together with energy companies Total, Pertamina, Equinor and industry group the CO2 Capture Project (CCP), have initiated a Joint Industry Project (JIP) to identify required membrane qualities for a subsea gas and CO2 separation process, to minimize pretreatment needs and avoid large processing modules, Aker Solutions announced on Friday.

Current CCP members are BP, Chevron, and Petrobras.

Flooding an oil field with CO2 increases recovery rates, and extends the life of an offshore field. Aker Solutions has developed new concepts for subsea processing of well streams from CO2-flooded oil fields, in which CO2-rich gas is separated, compressed and reinjected back into the reservoir. The hydrocarbon-enriched gas can then be routed to the topside production facility.

According to Aker Solutions, subsea gas separation has the potential to make CO2-rich gas fields commercially viable.

Testing membranes

A prerequisite for the concept to be technically and economically attractive is that the gas separation is done with robust membranes that reduce pretreatment requirements and remove the need for large processing plants, the company explained.

Also, the qualified operating range for relevant membrane materials do not match the optimal operating conditions for gas separation on the seabed. Hence, testing must be done in order to obtain knowledge about membrane performance under these conditions.

The project will perform tests of different membrane qualities under relevant conditions related to pressure, temperature, gas composition and rates. The tests will be carried out by the SINTEF research institute in Norway. The project also includes technical and economic engineering studies to assess the technology concept based on the test results.

The project aims to qualify membrane qualities that are suitable for bulk separation of CO2 in a typical subsea process and confirm technical and economic use of subsea processing as a favorable concept for the realization of offshore CO2 EOR in combination with reinjection and storage of CO2.

Aker Solutions delivered the first subsea gas compression system to Equinor for the Åsgard field offshore Norway. The system has been in operation with no unplanned downtime since it was installed in 2015. The subsea gas separation technology in combination with the subsea gas compression technology could make offshore handling of CO2 for EOR technically and economically attractive.


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Reuters: Spirit Energy up for sale

Centrica and SWM have reportedly launched a sale process of the North Sea oil producer Spirit Energy.

Illustration: Spirit Energy's Chiswick platform
Illustration: Spirit Energy’s Chiswick platform

Reuters on Monday cited a document sent to prospective buyers, according to which Centrica wants to sell its 69 percent ownership in Spirit Energy. Reuters also said that SWM would evaluate proposals for the remaining stake.

Spirit Energy was established in 2017, through a combination of Centrica’s E&P business with Bayerngas Norge. Centrica plc owns 69% of Spirit Energy, with Bayerngas Norge’s former shareholders, led by Stadtwerke München Group (SWM), holding 31%.

The company’s 2018 production was 46.8 million barrels oil equivalent (mmboe), proven and probable (2P) reserves of 270 mmboe, and contingent (2C) resources of 512 mmboe.

Per the company’s 2018 summary document, Spirit Energy had operated and non-operated interests across the UK, Norway, the Netherlands, and Denmark, with 33 producing fields and 148 exploration licenses.

Offshore Energy Today has reached out to Spirit Energy seeking comment about the reported move by Centrica to sell the company. We’ll update the article if we receive a response.

Worth reminding, Centrica in July announced its intention to exit the oil and gas exploration and production business. Centrica at the time said it expected to exit its interest in Spirit Energy by the end of 2020 via a trade sale.

“Spirit Energy is a robust, self-financing entity in a range of price environments. However, E&P is not strategically core for Centrica and our intended exit from Spirit Energy is aligned with the global transition to a lower-carbon energy mix,” Centrica said in July.

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i3 Energy spuds new pilot well on Liberator field

UK independent i3 Energy has started drilling a new pilot well at its Liberator field in the outer Moray Firth, offshore UK.

Borgland Dolphin under mobilization to the current drilling operations for i3 Energy in August 2019. Source: Dolphin Drilling CEO Bjørnar Iversen

i3 said on Friday that this was the third and final well in a three-well campaign the company was carrying out with the Borgland Dolphin rig.

According to the company, the Liberator A2 pilot well will help i3 choose where to drill the future LP-02 production well.

The drilling of the final well follows the successful drilling, plugging, and abandonment of the Serenity well. The well struck oil in late October, confirming the strong commercial potential of the Serenity area.

Preliminary well results were consistent with i3 Energy’s pre-drill estimate of 197 MMbbls STOIIP for the entire Serenity closure within the company’s license area.

At the time, i3 has also agreed a rig contract extension and payment deferral with Dolphin Drilling. Namely, due to an unexpected on the Liberator field, and standby time incurred before drilling ops at Serenity, the company secured a right of first refusal on the Borgland Dolphin semi-submersible rig to January 31, 2020, so that the company can continue drilling operations at Serenity and Liberator.

Associated with this contract extension, Dolphin agreed to defer certain payments for drilling costs beyond September 30, 2019, which will be due to settle between January and August 2020.

i3 and Dolphin also entered into a strategic operational alliance for the use of Dolphin drilling rigs for i3 operations to August 2023, which would cover potential future appraisal and development drilling on Liberator and Serenity.

The company added in its statement on Friday that it agreed to issue £5 million of equity to the funders of its May 2019 junior loan notes at a price of 35p per share via private placement to provide flexibility to extend the drilling program.

The deadline by which i3 must enter a reserve-based lending facility or find alternative development financing has been extended from December 6 to April 30, 2020.

Majid Shafiq, CEO of i3 Energy, said: “We are excited to be drilling again at Liberator on the back of our success at Serenity.

“The A2 location has been selected as a low-risk target in close proximity to Liberator’s two well penetrations, giving us a high-level of confidence when tied into the recently reprocessed seismic that was used to select the Serenity discovery well location.

“The company is also very pleased with the additional funding we’ve received from our loan noteholders. Their continued material support shows a great level of confidence in i3’s assets and management team.”


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Oil majors’ West of Shetland assets to overtake North Sea as major producing basin in UK

Over the last four years oil and gas production in the West of Shetlands has risen and with that, a growing relevance for the biggest players still active in the UK continental shelf (UKCS), says GlobalData, a data and analytics company.

Clair Ridge platforms; Source: BP

The company’s latest research reveals that the West of Shetland (WoS) area retains the attention of major Exploration and Production (E&P) players in the region; however infrastructure restraints could hinder future growth potential in the basin.

Despite the US-based E&P majors, such as Chevron and ConocoPhillips largely divesting out of the UK’s E&P sector of late, their European peers have not followed suit, according to GlobalData.

Of the highly successful 30th UK Offshore Licensing Round held in 2017, approximately 75% of the licensed WoS blocks had European major participation. Moreover, European majors have stakes in 80% of the planned and announced projects in the area compared to approximately 40% in the North Sea.

Daniel Rogers, Upstream Oil and Gas Analyst at GlobalData, commented: “In 2018, Royal Dutch Shell (Shell) and BP Plc (BP)’s hydrocarbon production combined accounted for over half of the WoS total volume. Over recent years both companies have seen North Sea production volumes lose dominance in relation to their UK portfolios. As a result, the WoS is set to overtake the North Sea as Shell’s major producing basin in the UK by 2020, whereas this occurred for BP in 2018”.

The majority of upcoming field developments in the area are oil focused as oil processing capacity at the Sullom Voe terminal is currently around half utilized with expected excess capacity available over the near term. However, the Shetland Gas Plant (SGP), where the areas gas is collected, processed and exported, is currently running at less than 25% spare capacity and newly discovered gas volumes in the basin could push the infrastructure to its limits.

Rogers continued: “Total’s recently discovered Glendronach gas-condensate field is expected to add over 200 million cubic feet per day (mmcfd) of gas supply to the SGP at its peak and could commence production as early as 2021. This, in addition to gas volumes coming from the Cambo and Rosebank oil field developments could further strain the existing infrastructure.

“Operators looking to develop new gas fields in the WoS through the mid-2020s could be challenged by the areas capacity restraints. The investments required for facility expansions may impact project returns and force operators away from marginal gas developments.”


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Rystad: 2019 shaping up to be Norway’s best exploration year since 2014

Equinor on Wednesday announced an oil and gas discovery near the Fram field in the North Sea off Norway. Energy intelligence firm Rystad Energy has said that this has been the best year for discoveries on the Norwegian Continental Shelf since 2014. 

Illustration; Author: SP Mac

Equinor said on Wednesday that the recoverable resources were estimated at 6-16 million standard cubic metres of oil equivalent, corresponding to 38-100 million barrels of oil equivalent.

Commenting on Equinor’s oil and gas discovery near the Fram field in the Norwegian North Sea, Palzor Shenga, senior analyst at Rystad Energy said: “After a string of recent discoveries, 2019 is shaping up to be the most successful exploration year since 2014 on the Norwegian Continental Shelf (NCS).”

Rystad Energy estimates the discovery to hold recoverable resources of around 70 million barrels of oil equivalent (boe). This will bring cumulative discoveries year-to-date to 520 million boe, surpassing the 518 million boe found in 2018.

“Norway could see total discoveries reaching 650 million barrels of oil equivalent by year-end with decent success in ongoing exploration drilling campaigns,” Shenga added.

Aker BP has been the most successful driller thus far in 2019, with 41% of discovered volumes. Equinor comes in second, with 23% of total volumes. Lundin, Vaar Energi, and Wellesley Petroleum share the final place on the podium with 4% each.

“While the Barents Sea has been Norway’s most successful in the past seven years in terms of total volumes discovered, the number of discoveries and the volumes found prove that the mature parts of the NCS still have a lot to offer. The proximity of these discoveries to existing infrastructure makes them lucrative,” noted Shenga.


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Seacor Marine selling North Sea ERRV business

Offshore support vessel provider Seacor Marine has decided to sell its North Sea emergency response and rescue vessel business to North Star.

Illustration Only: A Seacor ERRV vessel - Image Source: Seacor Marine
Illustration Only: A Seacor ERRV vessel – Image Source: Seacor Marine

Under the terms agreed, North Star will pay approximately £19.5 million (equivalent to approximately US$25.1 million). North Star might also pay up to £4 million ($5.2 million) based on revenue targets being achieved in 2020 and 2021. The transaction is expected to close in early December 2019 if all the conditions are met by then.

John Gellert, Seacor Marine’s Chief Executive Officer said the divestment was the continuation of Seacor’s strategy of reducing costs, optimizing regional footprint, and focusing resources on core assets, regions and services with the highest potential for improved margins. He said that the proceeds from the transaction would help us Seacor to realize the goal of achieving profitability independent of a full market recovery in oil and gas services.

“We entered the ERRV Business in 2001 and it has been a positive contributor to our fleet mix and performance ever since. I thank all the employees working in the ERRV Business for their dedication and commitment to safety all these years and express confidence in their ability to build a class-leading ERRV business with North Star,” Gellert said.

Seacor Marine in August reported a 2Q net loss of $28,4 million. The company then said it had initiated cost reduction initiatives including layoffs, reorganization of the management structure, and closure and/or consolidation of certain facilities in the U.S. Gulf of Mexico, the Middle East, and Europe.

Seacor in August said it expected the cost-cutting initiatives would realize annualized recurring savings of at least $8.0 million.

According to Seacor’s Annual report for 2018, the company last year had 19 standby vessels in the North Sea region.


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Heerema to supply world’s largest crane vessels with shore power

Dutch contractor Heerema Marine Contractors will provide its crane vessels with clean energy by switching them from diesel generators to wind energy. 

Heerema's crane vessel Thialf
Heerema’s crane vessel Thialf; Source: Heerema

By switching off the diesel generators, total emissions will be reduced by the equivalent of the annual emissions of approximately 5,000 diesel cars, Heerema said on Friday.

Eneco will supply power from the wind farm on Landtong Rozenburg. Heerema’s crane vessels are often moored in the Calandkanaal in Rotterdam. The use of clean energy reduces noise and air pollution and significantly reduces CO2 emissions.

To supply the power, an “e-house” of 16 by 9 meters will be built on Landtong Rozenburg together with several transformers. Eneco and the Port of Rotterdam Authority have set themselves the goal of providing vessels, in addition to those of Heerema, with shore power at other locations in the vicinity.

According to Heerema, it is not very common internationally that these types of large vessels are connected to shore power. What makes the project truly unique is the direct supply of wind turbine power to these nearby seagoing vessels, Heerema said.

Eneco (80%) and the Port of Rotterdam Authority (20%) are now establishing the “Rotterdam Shore Power B.V.” with Heerema as their first customer. In addition to supplying Heerema, this new power company wants to supply shore-based power to several companies in the area. Discussions on this are ongoing. Other nearby terminals can be supplied with shore power from the e-house on Landtong Rozenburg.

5,000 diesel cars

Heerema’s Sleipnir and Thialf are the largest crane vessels in the world. These crane vessels are regularly moored in the Calandkanaal in Rotterdam for maintenance or to prepare for projects at sea. Vessels need energy to run on-board facilities. These include pumps, cranes, lighting, air conditioning and other equipment. Vessels usually deploy their diesel generators to generate the necessary power. They make noise and emit particulate matter, nitrogen oxide (NOx), sulfur dioxide (SO2) and CO2, among other things.

The diesel generators of Heerema’s vessels produce approximately the same amount of these emissions each year as do 5,000 diesel cars. By switching off the generators, emissions of CO2 are reduced by approximately 15,000 metric tons each year.

Municipal subsidy

With this project, Heerema, Eneco, the Port of Rotterdam Authority, and the Municipality of Rotterdam want to show that it is possible to supply shore-based power to large seagoing vessels, Heerema explained. Because of this demonstration aspect, the municipality has reserved a €2 million subsidy for the project in its 2020 budget.

This is on condition that the e-house on Landtong Rozenburg, in consultation with local residents, will be well integrated into its surroundings. If the Rotterdam Shore Power B.V. can connect several companies and its income increases as expected, the municipal subsidy will be returned.

Integration into Landtong Rozenburg

The project will apply for permits in late 2019 and construction is to start in the spring of 2020. The most important part is building the e-house of approx. 16 x 9 x 5.5 meters, including several transformers. This e-house will be located near Heerema’s berth on the north side of the Noordzeeweg on Landtong Rozenburg. The integration of this e-house into its surroundings is very important and local residents will be invited to express their views on the plans at several meetings in the near future.

Heerema’s vessels also need to be converted to connect to shore power. If everything goes according to plan, Heerema’s vessels will be plugged in sometime next year.


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Viking Supply Ships to buy newbuild PSV duo

Swedish offshore vessel owner Viking Supply Ships has entered into a contract to purchase two vessels currently under construction.

Image: Viking

Viking Supply Ships said on Friday that the contract for the acquisition was made in partnership with funds managed by Borealis Maritime.

According to the company, in addition to the partial ownership, Viking was awarded full operational and commercial management of the vessels by Borealis.

The two new vessels are high-end platform supply vessels (PSV) of Wartsila VS 4411 DF Design and will be completed by Remontowa Shipbuilding in Gdansk, Poland.

The vessels are set to be delivered from the shipyard in the fourth quarter of 2020 and the first quarter of 2021, respectively.

The vessels are environmentally friendly with duel fuel capabilities meaning they can run on LNG or MGO and will also come fully equipped with a battery pack solution which will further reduce consumption and emissions.

“The vessels are considered to complement the existing fleet and will further enhance the group’s harsh environment capabilities towards its clients,” Viking stated.

Viking also said that the transaction-specific details were confidential, but represented a significant discount compared to original contract price and estimated newbuild prices for similar assets.

The vessels are 89,2 meters long and 19 meters wide, have an Ice–1C classification and have a deck area of 980 square meters.


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Norway’s oil fund now worth NOK 10 trillion

Norway’s sovereign wealth fund, popularly known as the oil fund, has grown to a record 10 trillion Norwegian crowns (NOK) or 1,091,750,000,000 U.S. dollars. To remind, the fund had hit a one trillion-dollar value mark in 2017.

llustration only: Equinor’s Oseberg field center. Source: Equinor/Harald PettersenThe world’s largest sovereign wealth fund formally known as The Government Pension Fund Global received its first capital in 1996 when the oil revenue from the government was transferred to the fund for the first time. The mission of the fund to bring financial wealth for future generations of Norwegians once the oil revenues decline.

“23 years ago, the Government Pension Fund Global received the first inflow from the Ministry of Finance of nearly 2 billion kroner. Since then, the fund has grown to 10,000 billion kroner,” Norges Bank Investment Management which manages Norway’s oil wealth said on Friday.

“When the fund was set up, nobody thought it would pass 10,000 billion kroner. We were lucky to discover oil. The return on the investments in global financial markets has been so high that it can be compared to having discovered oil again,” said Yngve Slyngstad, Chief Executive Officer in Norges Bank Investment Management.

According to the 2Q report released in August, the fund had had a market value of 9,162 billion kroner as at June 30, 2019, and was invested 69.3 percent in equities, 2.7 percent in unlisted real estate and 28.0 percent in fixed income. The fund invests in thousands of companies and industries around the world, all outside Norway.

Fund larger than petroleum income

Norges Bank Investment Management was established as a separate organization on  January 1, 1998, to manage the fund with a market value of 113 billion kroner. In the first six months, 40 percent was invested in equities. Since then, the fund’s total return has grown larger than the total inflow to the fund, the bank said on Friday.

“Today, the fund is twice as large as the government’s estimated future petroleum revenues. The fund is larger than the government’s petroleum income measured in 2020 kroner and finances more than 17 percent of the national budget,” the bank says.

“Measured in 2020 kroner, the fund is greater than what the government has earned from petroleum activities in the last 50 years. How we as a nation manage the financial wealth for future generations will have a massive impact on welfare in Norway,” Slyngstad said Friday.


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CNOOC drills duster offshore UK

CNOOC Petroleum Europe Limited has drilled a dry well located West of Shetland.

Island Innovator rig
Island Innovator; Source: Island Drilling

CNOOC Petroleum Europe Limited, a wholly-owned subsidiary of CNOOC Limited, confirmed to Offshore Energy Today on Thursday it had drilled and completed its Howick exploration well, 206/21-1, located West of Shetland.

The well was safely plugged and abandoned with dry hole status, the company added.

According to information on Bassoe Offshore, the Howick well was drilled using the Island Innovator semi-submersible drilling rig with a dayrate of $160,000. The rig’s contract with CNOOC is set to expire in November 2019.

Elsewhere in the UK, the CNOOC Petroleum Europe Limited-operated Buzzard field remains shut in more than a week after its second shutdown this month. The field is located about 96 kilometers northeast of Aberdeen, in approximately 96 meters of water.

In related news, CNOOC Limited on Thursday reported it had achieved a total net production of 124.8 million barrels of oil equivalent (BOE) for the third quarter of 2019, representing an increase of 9.7% year over year.

Production from offshore China increased 8.9% YoY to 80.2 million BOE, mainly attributable to production growth from the start-up of new projects. Overseas production increased 11.2% YoY to 44.6 million BOE, mainly due to the contribution from the new projects of Egina and Appomattox.

During the period, the company made three new discoveries and drilled 19 successful appraisal wells. In offshore China, Kenli 6-1 in Bohai was successfully appraised and is expected to be a mid-sized oil and gas structure. In Guyana, the new discovery of Tripletail was made in the Stabroek block, which is the fourteenth oil discovery achieved in the block and will support the future development of the Turbot area.

On development and production, three out of six new projects planned for this year have commenced production. Bozhong 34-9 oil field, Caofeidian 11-1/11-6 comprehensive adjustment project and Wenchang 13-2 comprehensive adjustment project are undergoing offshore commissioning.

Offshore Energy Today Staff


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