Top News Stories in the World of Offshore Energy

wind-farm_2758881b.jpg

The world of offshore energy is seeing a rapid increase in research and development. This includes underwater oil and gas extraction as well as wind farms in coastal waters. This article will take a look at a round up of the most important stories regarding offshore energy in the news this week.

 

Eni Makes Important Discovery Off the Coast of Cyprus

 

The Italian oil company Eni has announced that it has made a lean gas discovery off the coast of Cyprus. The company has said that its discovery is ‘Zohr-like’ – Zohr is the largest gas field in the Mediterranean. The company has said that this new discovery has excellent reservoir characteristics.

 

Transocean to Take Discoverer India Out of Retirement

 

Transocean, the largest offshore drilling company in the world, is planning to reactivate its ultra-deepwater drillship Discoverer India. The ship has been out of use since December 2016 after Reliance ended its contract with Transocean 5 years early – incurring a heavy $160 million fine. But now the vessel is set to start a new contract on June 1st of this year.

 

Statoil Plans to Drill 40 Exploration Wells in 2018

 

The Norwegian oil company Statoil has unveiled plans to drill 40 more wells in 2018, to increase its capacity from 2017. This is expected to cost the company around $1.5 billion. Presenting its fourth quarter and full-year 2017 results the company said it expected its organic capex to be around $11 billion for 2018. Organic capital expenditure in 2017 was $9.4 billion.

 

 

Exxon wants bigger FPSO for Phase 2 of Liza development in Guyana

 

Exxon has announced that it wants to use a Singapore-built FPSO (Floating Producation Storage and Offloading) to explore the Liza oil site off shore of Guyana. The company is already thinking about phase two of the discovery, which includes the use of the FPSO and subsea systems. The plans for the Liza oil field indicated that phase one should be online by March 2020.

 

Allseas’ Newest Vessel Will Trump Colossal Pioneering Spirit

 

Allseas is an offshore services provider that owns the world’s largest platform installation/decommissioning and pipelay vessel. However, the company is now thinking about building an even bigger vessel, which will be called Amazing Grace. The owner of Allseas has revealed that plans to build this behemoth vessel were in play when Pioneering Spirit first left its dock in Korea back in 2014. The ship is expected to cost around $4 billion.

 

Shell Transforms Oil Platform into Artificial Reef

 

Oil giant Shell has turned its oil platform in the Gulf of Mexico into an artificial reef. This comes as part of the decommissioning process of Cougar, Shell’s final fixed leg platform in the Gulf. The aim of this transformation is to sustain “a healthy, vibrant Gulf of Mexico ecosystem as an artificial reef.” The reef is already home to a number of reef-dependent marine species.

 

Sapura Energy Scores Huge Offshore Contracts

 

Malaysian energy services and production company Sapura Energy won big with its contract recently, contracting a total of $232 million spread out over five different contracts. The contract work scope involves the removal of existing HP compressors and reinstallation of refurbished LP Compressors at EWDP-A.

 

 

 

Advertisements

Five renewable energy trends to watch in 2018

re100-renewable-energy.jpg

Renewable energy is definitely one of the most interesting spaces to watch at the moment. There have been huge developments in the sector, such as China exceeding its target for solar installations, but also some major setbacks, including Trump’s withdrawal from the Paris Deal.

The price of renewable energy will continue to drop

This is encouraging news for a world working towards a clean energy future. The price of solar is down over 60% since 2009, while wind costs have halved in a similar time frame. This has caused governments to witness record low prices for solar and wind at power auctions.

Experts believe that the number of country-level power auctions will continue to rise in 2018 and this will drive down prices in India and other producing countries. Meanwhile, investment in renewables stayed steady throughout 2017 but did not increase by much and this trend looks like it will stay the same for 2018.

China will carry out its ambitious energy plans

 

Despite China’s pollution being the worst of any country on the planet, the nation is also the global leader when it comes to solar power generation. Over the last ten years, the country’s capacity for solar PV generation has increased by a factor of almost 800. This means that China has already surpassed its 2020 solar PV targets, which shows phenomenal progress.

 

Currently, eight huge carbon capture and storage projects are underway in China as part of China’s pledge to invest almost £300 billion in renewable power by 2020. This comes along with a commitment to cap coal burning and thus improve the air quality in its cities.

 

Companies will step up

 

Target took the limelight at the end of 2016 when it was announced that it had solar panels installed on 300 of its stores. This made it one of the leading corporate players on the solar power scene, but Target is not alone in this game.

 

Apple has opened a brand new campus in California, which is 100% dependent on green energy, while Goldman Sachs has joined RE100, a cluster of huge companies who are committed to becoming 100% dependent on renewables. There is also a push from investors for companies to disclose their exposure to climate change.

 

More jobs will be churned out thanks to the renewables industry

 

A report by the International Renewable Energy Agency has revealed that almost 10 million people across the globe work in the renewables sector. What’s more, the occupations of solar photovoltaic installer and wind turbine technician are the fastest growing in the US.

 

The renewables industry is relatively labour intensive, meaning it requires a significant amount of man power to keep it all functioning. We should expect to see thousands more jobs being created in this sector in the foreseeable future. However, the demand is for skilled workers, so individuals hoping to tap into the sector should think about getting qualified now.

 

There will be more competition in the battery market

 

Tesla is hoping to complete the construction of its Nevada battery factory (the biggest of its kind in the world) by the end of 2018. More huge battery factories are also expected to crop up in China, Sweden, Hungary, Poland and Germany.

 

The UK also has big plans for energy storage and is investing £246 million into research and development to put the nation ahead of the game. It has also been proposed by researchers that countries look at other ways of storing energy besides lithium-ion batteries.

The largest oil and gas companies in the world by Revenue

midas-oil-rig.png

When it comes to the oil and gas markets, the terms used to describe the largest companies do not do their size justice. With revenues that surpass many countries’ gross domestic product, these companies keep our lights on, factories producing and transportation moving. So who are the players in this lucrative, and essential field.

1 Saudi Aramco

Making the top of our list is Saudi Aramco. A state-owned enterprise, it is the largest oil and gas company by revenue, which should come at no surprise given the Kingdom of Saudi Arabia’s vast oil and gas reserves over which it has the lion’s share of exploration and exploitation rights. The company can boast access to the second largest proven reserves of oil.

  1. Sinopec

One of China’s major oil and gas companies, Sinopec is traded on the Hong Kong, Shanghai, and New York stock exchanges, though it’s parent company, the Sinopec Group, is state owned. Though it is mainly active in the downstream markets, Sinopec’s businesses include oil and gas exploration refining, and marketing; as well as other activities in the petrochemical markets.

  1. China National Petroleum Corporation

Another behemoth player, the CNPC is one of the largest integrated energy groups in the world. CNPC forms the government-owned parent company of publicly listed PetroChina, and has seen many waves of restructuring and reorganization. Operating internationally since 1993, CNPC is active in over 30 countries.

  1. PetroChina

Though it is already mentioned above, PetroChina deserves its own mention in this list as the publicly traded arm of CNPC. Concerning itself with the exploration and exploitation of oil and gas reserves, this 18-year-old company has quickly become one of the major international players in terms of revenue in the oil and gas sector.

  1. Exxon Mobil

The first company in the Western Hemisphere to make the list is the US oil and gas giant Exxon Mobil. The company can trace its roots back to 1870 and Standard Oil. 1999 saw the company become the brand we know it as today with the merger of Exxon and Mobil. Though its revenues rank it in the top-5 of oil and gas companies, in terms of production the company ranks in the teens when compared to the state-owned enterprises.

Goldman Sachs’ Oil Analyst Advises on Making Money in Flat Market

gettyimages-504159316.jpgA senior analyst at Goldman Sachs has good news for oil traders. Jeff Currie has explained that despite the market being flat, oil traders are in a good position to make some great returns. This may come as a surprise given the probability that prices will fall from their multi-year highs over the next few months.

On Tuesday, oil prices reached their highest level since the middle of 2015. This came amid political concerns from various OPEC nations, which offset the forecast of higher oil production from the U.S.

OPEC, along with a number of allied producers, including Russia, has agreed to curb oil production in a bid to reduce global stockpiles and prop up the price of oil. Although this supply limitation was due to be lifted in March of 2018, it has been extended until the end of the year.

Currie explains: “We’re not bullish on prices but we are bullish on returns.”

He also noted that the energy market environment is very strong and that traders investing in oil will still be able to benefit throughout the year from what is known as backwardation. This is when the current price of oil is higher than the future cost of oil and sellers are willing to make future deals on this lower forecasted price. This occurs because of a high level of immediate demand and creates positive carry.

What is positive carry?

Currie sums it up succinctly by saying: “When we talk about positive carry in oil, the investor can go out and buy the back end of the (price) curve, hold onto the position, roll it up higher, sell it at a premium and buy again. That’s where we expect the returns from oil to come from,”

Late last year, Goldman Sachs revised its price forecast for Brent crude oil, lifting it from $58 per barrel to $62. Similarly, its prediction for WTI was raised to $57.50 from $55. This price inflation is said to be partly due to the commitment from OPEC to reduce oil production. The oil cartel and its allies were not expected to have stood behind their commitment so strongly and this is why prices are now being re-estimated.

Last week, Eugen Weinberg from Commerzbank declared that we were likely to see a pullback of around 15% over the next few weeks. This was put down to a ‘massive overheating of the speculators’ and would probably correct itself over the next month.

Back in 2014 the world saw a dizzying oil price collapse from nearly $120 per barrel in June to around $70. A number of factors caused this plummet, including a strong U.S dollar and an increased production in shale oil by the United States. OPEC’s reluctance to curb output was also seen as a major driver behind the crash, especially given the particularly weak demand for oil at that point in time. However, OPEC has now fully committed to limiting output in order to prevent another crash like this happening in the future.

Improving Oil and Gas Efficiency Through Digital

oil-gas-banner.jpgOperational efficiency is the latest goal for the oil and gas industry. The sector is under immense pressure to become more efficient due to the continued fall of oil prices and subsequent tighter profit margins.

As the oil and gas sector continues to fluctuate economically, the operations have remained pretty much the same. This means that in order to achieve a better level of efficiency, industry members are going to have to take a step back and consider a completely new operations model. This is the only way to make a real difference to production performance.

It is believed that the solution to this conundrum lies with Digital – a term which includes the factors that make up the Internet of Things (IoT). These factors are data, machines and people and the confluence of these areas will have a positive effect on production efficiency. Indeed, the IoT will be able to boost throughput, improve field recovery and create better asset reliability.

It is clear that oil and gas leaders need to effect a fundamental change in how they operate and what kind of strategy they implement in order to really take advantage of digitisation. There are a number of trends being seen in the tech world, such as robotics and sensors, which can help improve field automation in a way that is pervasive.

From discussions with clients whose companies were successful in their drive for better operational efficiency through technology, we can see that they applied the following:

  • Common Standards: When operational technology and information technology meet, it is vital that there is in place a set of shared standards. These standards must adhere to strict operational requirements but must still allow information to be shared across the company.
  • Collaboration: In order to make sure the digitisation and integration of a company goes as smooth as possible it is essential to collaborate information. This means there must be multidisciplinary knowledge between information technology, data management, operational technology, cybersecurity and process design.
  • Self Funding and Adaptability: By keeping an eye open for potential brownfield sites that could be used for projects companies are able to deploy digital technology. This increases the thrust of the organisation and prevents any hesitation when it comes to adopting new technologies.
  • Security and Compliance: It is crucial that assets are protected, especially as we are now in an age where they are increasingly linked to the network. The digital infrastructure of a company must be closely monitored to protect it from cyber attacks. Threats must be taken seriously and any vulnerabilities must be addressed. There should be a general culture of security awareness within the company.

Oil and gas companies that revamp their operations to account for new technologies will stay ahead of the game. Much of what is being developed now in terms of technology is not only going to help oil and gas companies become more efficient, but it is going to completely change the game. This is the way oil and gas companies can become the winners of tomorrow.

UK Won’t Allow Sanctioned Russian Gas to Enter Grid

eu-responds-to-panic-over-russian-gas-cutoff-with-plan-to-help-ukraine-pay-debts.jpg

On Thursday night a shipment of Russian gas arrived at the terminal on the Isle of Grain. This came as Britain suffered its coldest temperatures of 2017 – a factor that has led to an increased demand for energy to keep homes warm. It seemed like the arrival of this tanker was a propaganda coup for Russia’s leader Vladimir Putin as it came accompanied by tweets from the Russian embassy in London saying, “Feeing cold? Help is on the way”.

 

However, it has since been revealed that this is likely to be fake news. It is much more likely that the gas shipment arrived and was offloaded into a storage facility in the UK only to be held for a while before being transferred to a different tanker and shipped off somewhere else in the world.

 

A source in the know regarding the operations of the National Grid on the Isle of Grain has assured us that the gas has not and will not enter the UK domestic gas network.

 

The shipment apparently came from Russia’s new liquefied natural gas facility in the Arctic Circle, Yamal. The first destination of LNG shipments from this facility has been under close inspection from energy traders and political analysts alike. The fact that it made its way to the UK seemed like a clear sign of the UK’s dependence on imported gas. The decline in North Sea reserves has caused the nation’s energy security to weaken – a temporary shutdown of one of the most important North Sea pipelines has contributed to this problem.

 

However, the fact that this shipment has not entered the UK’s grid means that it must have adequate supplies coming in from elsewhere. National Grid has denied a lack of energy security, claiming that there was no shortage of gas. Indeed, the lower demand from businesses that have closed over Christmas has offset the increased demand from households.

 

Gas prices in the UK spiked in December when the Forties pipeline in the North Sea closed to have its crack fixed but this increase has now reverted back to normal. The pipeline is nearly back to full functionality and expects to be there by early 2018.

 

Shale gas companies in Britain were hoping to use the Yamal shipment to press fracking. Before it was revealed that the shipment was destined for other parts of the world, the trade group for onshore oil and gas producers, UKOOG, publicly stated that Britain already imported half of its energy supplies. They then said that this statistic could increase to 80% dependency on foreign energy by 2035.

 

In an industry where the seller has complete control, this dependency could be a problem for the UK as it would leave it vulnerable to the whim of other governments with regards to political and economic interests. Ken Cronin, chief executive of UKOOG said “surely it is better for our economy and our environment that instead of relying on others we produce the gas from underneath our feet.”

OECD: Canada lags behind other countries for environmental taxes

Can_Prov_Map_480_gl2.jpg

It might be the friendliest nation on earth but when it comes to saving the environment, Canada is lagging behind other countries. Currently Canada is at the bottom of the list of countries that are taxing pollution but the Organization for Economic Development and Co-operation (OECD) hopes this will change as Ottawa steps up existing taxes and imposes more carbon levies.

The OECDs latest report stated quite clearly that a lot more needs to be done to discourage polluters in order to counter the growth in greenhouse gas emissions that have damaged the environment over the past 15 years. The oil and transport sectors are two of the main offenders.

Canada has been advised by the OECD that it must “reduce drastically the carbon intensity of its energy production, particularly in the oil-sands industry,” in order to achieve its climate change goals.

In 2014 only Mexico and the United States ranked lower than Canada in terms of environmental taxes out of 35 member countries. Some measures that are being implemented include taxes on gasoline, tipping fees at landfills and water charges. Although some provinces have put in place a range of these levies, it has not been enough to have an effect on the country’s overall ranking.

Trudeau’s government is looking to pass legislation in 2018 that would affect provinces that do not have a pricing plan of their own. It would impose a carbon tax on them, which would rise to around $50 per tonne by 2022.

At the rate it is going, it looks like Canada is going to struggle to meet its goal of reducing emissions by 30% from 2005 to 2030. Nevertheless, the OECD has lauded Canada’s efforts to come back from the damage that was cause by Harper’s administration failing to implement any broadly based measures. However, it has also been noted that Canada needs to act soon if it wants to make any kind of difference before 2030.

There is a plan in play at the moment by the Liberal government, which involves carbon pricing and some serious investment in the development of new, clean technology. If this plan is strictly adhered to then there could be some real change in the pipeline for Canada, which is currently the fourth-largest emitter of greenhouse gases out of all of the OECD countries. On top of that, it is the second most carbon intensive country given the size of its economy.

The biggest challenge for Canada is going to be curbing the emissions from its oil industry, as these are responsible for about 25% of its greenhouse gas emissions. But, the oil industry is playing its part and has already stated that it is working to reduce these emissions. What’s more, the government has allocated around $440 million from its expected carbon taxes to help the oil industry become cleaner.

One of the incentives that is hoped to soon be in place is a special price break for industry leaders who significantly cut down emissions. This would make being clean more economical for oil producers.