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Norway Oil Drilling Rig Workers Agree Wage Deal, Avoid Strike

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Workers on Norwegian offshore oil drilling rigs signed a new wage deal on Wednesday, avoiding a strike, labour unions and employers said in separate statements.

Some 280 rig workers had threatened to strike if the talks failed, including staff on Rowan Companies’ Viking and Gorilla rigs, and on the Statoil-operated Heidrun, Statfjord, Aasgard, Volve and Oseberg fields.

Labour disputes on drilling rigs typically halt oil and gas exploration and drilling of new production wells at existing fields, but do not affect current production at wells.

Workers will get a 0.5 percent pay rise, said Norway’s state-appointed mediator, who brokered the deal.

The price of North Sea crude oil, Norway’s top export, has fallen by some 60 percent since 2014, resulting in about 40,000 layoffs in the industry, according to the Norwegian Shipowners’ Association, which negotiated on behalf of rig firms.

“It’s estimated that another 15,000 will lose their jobs before activity levels recover, which at the earliest will happen two years from now,” it added.

As part of the wage deal, it was agreed that those being laid off will have the right for a two-year period to be rehired if an employer increases staffing.

In return, both unions and employers will contribute to identifying potential cost cuts, the state mediator said.

“We had wished for a better outcome on wages than this mediation gave us,” said Hilde-Marit Rysst, who heads the Safe trade union, one of three organisations negotiating on behalf of workers.

“But given the situation this industry is in, we’ve shown moderation in order to win acceptance for our key priority, the right to reinstatement. We expect markets to improve, and if they do this victory will allow many of our members to win back their jobs,” she added.

Separately, oil and gas companies are due to negotiate with production workers from June 30 to July 1. If no agreement is found, a strike hitting the output of crude and natural gas could begin on July 2.

 

 

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Hilong wins first offshore lifting contract

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Hilong Petroleum Offshore Engineering Co. Ltd. won a contract from TIMAS to provide a “Hilong 106” pipe-laying derrick barge to install jackets for the HCML Madura MDA – MBH offshore gas field development project jointly funded by China National Offshore Oil Corporation and Husky.This is Hilong’s first offshore lifting operation contract and also the first offshore services contract won from overseas market.

The project will be implemented in the ocean region of Java, Indonesia. Work is expected to commence in mid-November 2016, and will be completed by the end of February 2017. The primary content of construction is the lifting and upending jackets underwater.

Xiao Long, Hilong Group Vice President and General Manager of Hilong Petroleum Offshore EMarine Engineering Co., Ltd., explained that “Hilong Petroleum Offshore Engineering Co., Ltd. earned the positive recognition of the client and won the contract thanks to its innovative T&I technology, efficient project management team, as well as the inclusive construction solutions offered by the“Hilong 106”pipe-laying derrick barge. This is not only of great significance to the performance of Hilong Petroleum Offshore Engineering service business, but also lays a firm foundation for the further development of Hilong Petroleum Offshore Engineering Co., Ltd.”

For more information, please visit: http://en.hilonggroup.com/

 

 

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U.S. Offshore Regulator to Unveil Tougher Environmental Safeguards

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The U.S. government agency created after the 2010 Deepwater Horizon oil spill plans in coming weeks to unveil tougher financial requirements for offshore oil producers aimed at protecting taxpayers from the risk of cleaning up abandoned oil rigs, an agency executive told Reuters.

Under the new guidelines, the Bureau of Ocean Energy Management (BOEM) will demand additional guarantees to cover producers’ legal obligation to plug offshore wells and dismantle rigs in the Outer Continental Shelf once they have extracted oil and gas, according to Renee Orr, chief of Strategic Resources at the agency.

Currently, companies are exempt from providing supplemental bonds for the cleanup-process, known as decommissioning, if the total estimated liability is less than half of their net worth.

The stricter bonding rules, which will demand more capital of more companies, were proposed by the federal agency in September and will be implemented this year, Orr said.

They follow more than 80 bankruptcy filings by North American oil and gas producers since the beginning of 2015, when plunging oil prices gripped the sector, triggering concerns at the agency that companies would walk away from clean-ups.

“BOEM’s primary goal is to ensure that the U.S. taxpayer never has to pay for decommissioning OCS facilities,” Orr said in an interview.

Randall Luthi, president of National Ocean Industries Association, which represents the U.S. offshore energy industry, said in an interview: “We’re looking forward to being able to review the guidance in detail and are hopeful that it provides flexibility to both the agency and the industry.”

If a company defaults on its financing obligations, the government will track down previous owners or operators of the wells, Orr said.

Leases on many of the wells were originally owned by oil majors like BP, Royal Dutch Shell PLC, Exxon Mobil Corp and Chevron Corp.

BALANCE SHEET PRESSURE

Under the new rules, companies will be exempt from providing additional clean-up guarantees only if the total estimated liability is less than 10 percent of a company’s net worth.

It will be particularly difficult for companies to meet the new criteria given that net worth, which is closely tied to the value of proven reserves, has shrunk during a prolonged oil price slump.

This could pose a hurdle for producers that are already struggling to make interest payments on their debt, some restructuring advisers said.

“Bankruptcies have triggered BOEM’s enthusiasm for bonding, but as industry groups have commented, the proposed cure may actually put more of them into bankruptcy,” said Poe Leggette, co-leader of law firm BakerHostetler’s energy team, which represents offshore producers.

To mitigate financial risk for the companies, the government is working with small and large producers to craft tailored financial plans, Orr said.

The agency already has met privately with dozens of oil-and-gas producers and insurers to lay out its new rules, which may permit additional forms of security previously not allowed, such as third-party guarantees and U.S. treasury notes, she said.

Two energy exploration and production companies, Stone Energy and W&T Offshore, have been told by the agency that they no longer qualify for bonding exemptions for their Gulf of Mexico operations under the current rules.

Both companies said in SEC filings that they are in discussions with the agency to meet its demands for hundreds of millions of dollars in guarantees to cover offshore clean-ups.

In separate SEC filings, Stone Energy said it was considering a prepackaged bankruptcy petition, while W&T announced debt restructuring talks with its creditors. Neither company responded to requests for comment.

 

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Defining optimum operational speeds for tidal turbines

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It is crucial for OpenHydro to obtain precise current, wave and turbulence information as they are delivering two of the world’s first grid connected tidal arrays. Why have they opted for the Signature500 current profiler to collect this data?

Tidal turbine manufacturer OpenHydro Technology Ltd, a DCNS company, have opted for Nortek’s Signature instrumentation to aide in their understanding of the environment in which their 16 meter diameter tidal turbines operate.

Two such turbines have already been deployed on EDF’s Paimpol-Bréhat project in France. Two more turbines are in the final stages of completion and will be deployed in the Bay of Fundy, Nova Scotia later this summer.

The importance of understanding flow fields around each turbine

With OpenHydro’s turbines being deployed on such a large scale, their requirement for understanding local currents could not be more pressing.

Understanding the flow field around each turbine is crucial to understanding the optimum operational speeds and the loads on the turbine itself. Furthermore, quantifying these currents improves understanding of how the turbine structure affects the currents and thus the local environment.

OpenHydro chose Nortek’s Signature500 current profiler for its measurement range capabilities and high-end performance specifications.

“The Nortek Signature500 is a superb measurement device which performs very well. The devices have been easily integrated into our system thanks to their usability and the data recorded so far has been of excellent quality”, says Hamish Kerr, Oceanographic Engineer at Open Hydro.

Mitigating risk and cost

OpenHydro hope to utilise the very fast sampling and concurrent capabilities of the Signature500 to define current velocities to an unprecedented degree. These measurements are key, not just to OpenHydro but eventually, the entire tidal community.

They will help validate and improve existing numerical models, bringing a level of understanding to the tidal sector which will aid in mitigating some of the risk and thus cost of deployment, which is crucial for the growth of the sector.

“Nortek’s tireless customer service has been a great help to us and has made the task of integration, installation, data acquisition and processing go very smoothly”, Hamish Kerr adds.

 

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In the Birthplace of U.S. Oil, Methane Gas Is Leaking Everywhere

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A mail box sits on an abandoned well pipe near blooming peonies, logs snag on metal casings rising out of a creek, children swing next to rusted pump jacks.

In Pennsylvania, birthplace of the U.S. oil industry, century-old abandoned oil wells have long been part of the landscape. Nobody gave much thought to it when many were left unplugged or filled haphazardly with dirt, lumber and cannon balls that slipped or rotted away.

But the holes — hundreds of thousands of them pockmark the state — are the focus of growing alarm, especially those in close proximity to new wells fracked in the Marcellus shale formation, the nation’s largest natural-gas field. They leak methane, which contaminates water, adds to global warming and occasionally explodes; four people have been killed in the past dozen years.

“We had so much methane in our water, the inspector told us not to smoke a cigar or light a candle in the bath,” said Joe Thomas, a machinist who lives with his wife, Cheryl, on a 40-acre farm with at least 60 abandoned wells. Patches of emerald-hued oil leech to the surface, transforming the ground into a soupy mess.

Hundreds like the Thomases live over lost wells.

Reviewing Rules

Now the state’s attorney general is reviewing rules requiring drillers to document wells within 1,000 feet of a new fracking site. This puts Pennsylvania among states such as California, Texas, Ohio, Wyoming and Colorado confronting the environmentally catastrophic legacy of booms as fracking and home development expand over former drilling sites.

As the number of fracked wells increases, so does the chance they might interact with lost wells. Pennsylvania regulators have documented several instances of fracking too close to an abandoned hole, causing methane to leak into homes, the air or water.

At least 3.5 million wells have been drilled in America since operators plumbed the first hole in the small Pennsylvania town of Titusville back in 1859.  It was oil pumped from this rugged landscape, near the state’s western border with Ohio, that John D. Rockefeller started refining a few years later in a venture that would evolve into the Standard Oil Trust.

Years of Work

Today, about a quarter of the 3.5 million wells across America are active, leaving an inventory of 2.6 million that are no longer in use. The locations of some inactive wells are documented, but little is known of the whereabouts of wells drilled before permitting regulations were enacted 60 years ago. Only 10 percent of abandoned wells are recorded in state databases — meaning there are years of work ahead to locate and plug them. Seth Pelepko of Pennsylvania’s Department of Environmental Protection says the agency has plugged only 3,000 such sites in 30 years.

Regulators are ramping up detection efforts, including testing the use of drones equipped with magnetometers. For the moment, however, they rely on a low-tech solution of “citizen scientists” who hunt for leaking wells near watersheds and recreation areas in the Allegheny National Forest.

Laurie Barr is one.

On a recent search, Barr overcame her fear of rattlesnakes sunning in dense grass, bears lurking in hemlock groves and bees — she’s allergic — nesting in moss-covered logs. Wearing an orange pocketed vest stuffed with a GPS, mace, a water tester and a methane sniffer, Barr forded a stream and hiked downhill deep into the trees. She urged companions to “remember that rock” to find the way back. The stones, however, all looked the same.

Oil Sheen

An hour later, she came upon a decades-old rusty pipe and overturned well equipment sticking out of a ravine. Fluid poured out of the abandoned well, which Barr reported to regulators in 2014. The noonday sun reflected a rainbow-colored sheen of oil off a pool surrounding the site. Officials have yet to investigate.

“If you were in Pittsburgh and knew this was happening thousands of times in your watershed, you wouldn’t be so happy,” said Barr, who co-founded Save Our Streams Pennsylvania in 2011 to search for such sites. She’s located about 1,000; most hadn’t been recorded in the state’s system. The state is clarifying coordinates before visiting some wells, said the DEP’s Pelepko.

 

Hiking through swamps, Barr pointed out a well spewing orange bacteria into a stream, a hole frequented by deer burping methane and brine, and a long rusted pipe with gas bubbling around it into the Allegheny Reservoir.

Greenhouse-Gas Emissions

“The assumption was these wells are not emitting much methane and we don’t need to worry about them,” said Mary Kang, a postdoctoral fellow at Stanford University in California who co-authored a widely cited paper on Pennsylvania’s wells. “Yet these old wells are emitting methane into the atmosphere, and they are worth considering in greenhouse-gas emissions inventories.”

Officials also are warning private-property owners of health risks. Generations of Pennsylvanians relied on the oil patch for their livelihood and became desensitized to the industrial footprint left behind.

The Thomases, who live near the New York border, have become aware that such wells pose risks. Recently, Barr held her methane sniffer over a muddy, oily hole she dubbed “the fudge pot” at their farm as blackbirds harassed a crow overhead. Beeping wildly, the device soon hit its limit. The well is now in line to be capped.

 

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C-Kore Systems awarded contract for Statoil for Subsea Monitoring Tools

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C-Kore Systems Ltd has been awarded a contract to supply Statoil with Subsea Electrical Monitoring Tools.
Statoil will be using the tools to monitor the insulation resistance and continuity of a new control umbilical during its installation at a field outside Bergen in the northern part of the North Sea.
Tim Overfield, managing director of C-Kore Systems commented, “We are becoming an established value added partner with the operators in the UK region of the North Sea and are excited to be introducing our technology into the Norwegian oil and gas market. Our monitoring units prove themselves to be extremely valuable to our customers by saving them time and money when installing new equipment or performing maintenance operations.”
The C-Kore Subsea Monitoring tools allow operators and installation companies to monitor the health of electrical equipment and interconnections during the entire installation process, even when traditional monitoring equipment must be removed, thus eliminating the “installing blind” problem. In fault-finding campaigns, the ease of use along with quick and accurate data provided by the units drastically decreases testing times, ultimately reducing the down time to the field.
For more information, please visit: http://www.c-kore.com

C-Kore displayC-Kore Tronic

 

 

 

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AWDR – Operational update for WilPhoenix

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Awilco Drilling PLC and Apache North Sea Ltd. have agreed that WilPhoenix should leave the yard in Hartlepool around 22 June 2016 and resume operations at Apache’s first drilling location around 26th June. A further update will be released once drilling operations have been resumed.

WilPhoenix is one of Awilco Drilling’s two enhanced pacesetter semi-submersibles and is equipped for drilling in water depths up to 1,200 ft.

 

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Hughes SSE purchase MV Line and launch survey services

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Hughes SSE has today announced the acquisition of the robust survey vessel MV Line. The MV Line has been purchased to support Hughes SSE’s growing survey capabilities. After a short refit the MV Line will be re-named MV Cerys Line and will be working on a number of Hughes SSE’s current and forthcoming projects.

Hughes SSE are pleased to be able to regain the vessels current crew, who will now be employed by the Hughes Group, Ian Hughes MD and Owner said “In these testing economic times through hard work and determination we have been able to continue to grow, and we welcome the MV Line and its crew to the Hughes Family. We are pleased we have been able to purchase the vessel and continue the employment of its crew during this tough time.”

The master of the MV Line commented ”We are excited to become part of the Hughes team. Hughes SSE as a company are growing and will continue to grow with new innovations and ideas striving to bring costs of renewable energy down.”

Ian continued “Over the past year we have invested a considerable amount of capital in assets that we feel allows us to offer a more cost efficient service to our current and potential clients. We pride ourselves in offering a full Turn-key service wherever possible.”

 

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Kenzie plays decisive role in offshore platform tribunal

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Kenzie Group has played an integral role in the owning company of an offshore platform successfully defending itself against claims from an engineering, procurement and construction contractor in a tribunal that lasted 50 days.

After negotiations between the owning company and the EPC contractors failed, the case was heard by three arbitrators in Oslo, who ultimately awarded the contractor just 10 per cent of the value of the claims that were made.

The defence was supported by the dispute resolution services of Kenzie Group, whose team provided written evaluations extending to hundreds of pages to the tribunal.

Kenzie’s documentary evidence provided arbitrators with a clear explanation of the methodology used in order to value the claims and assess variations from the contract of work.

The evidence also included calculations, measurements, drawings, industry norms and rate calculations to support the evaluation, which found the variations to be substantially lower than the amounts claimed.

Kenzie also worked with a leading Oslo law firm to provide litigation support services and assist them in dealing with issues that arose during the hearing.

In the final award, the arbitrators commented favourably upon Kenzie’s witness testimony.

Joseph Bond, managing director of Kenzie Group, said: “We were instructed to value some of the EPC contractor’s claims and variations on behalf of our client, and to prepare the client’s counter claims.

“We provided a comprehensive, substantiated and logical report that formed a key part of our client’s defence, and we were pleased that the arbitrators agreed with our assessment.”

 

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China’s March To Biggest Oil Importer Hits US Shale Roadblock

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The world’s biggest oil importer. The title nobody wants.

For decades the U.S. held undisputed rights to the crown. Last year, China squeaked ahead for the first time amid growing demand and as rising U.S. shale production displaced overseas deliveries. The Middle Kingdom looked poised to become the center of the crude importing world.

Then $30 oil happened. U.S. drillers shut the most rigs in modern history, production began to fall and imports have rebounded. Chinese oil firms also shuttered output and kept demand growing. Now the two are neck and neck.

“I don’t think any country would want to boast about being the world’s largest importer of crude,” said John Driscoll, chief strategist at JTD Energy Services Pte in Singapore. “Who gets more nervous during OPEC meetings? Who’s more vulnerable to supply disruptions, geopolitics or resource nationalism?”

The one group with no reason for dismay is the Organization of Petroleum Exporting Countries, which needs buyers to soak up a supply glut that has cut prices in half from two years ago.

U.S. Imports

The U.S. imported 8.04 million barrels of oil a day in March, according to the Energy Information Administration, the most since August 2013 and about 330,000 more than China did in the same period. U.S. output has fallen 5.9 percent since peaking in April 2015, and drillers have idled 80 percent of the country’s oil rigs since October 2014.

The increase in U.S. imports comes after years of declines due to increased shale production. Meanwhile Chinese economic growth has boosted imports four-fold since the beginning of 2005, making the country the second-largest consumer in the world. China imported more oil than the U.S. in a month for the first time in April 2015 and again in February.

China’s crude production dropped by the most in 15 years in May as producers from PetroChina Co. to Cnooc Ltd. reduce drilling in unprofitable fields. Lower domestic output will increase the country’s dependence on imports from the Middle East and Russia, Gordon Kwan, head of Asia oil and gas research at Nomura Holdings Inc. in Hong Kong said in an e-mail. China also recently allowed smaller independent refineries, known as teapots, to begin importing oil directly, creating new buyers.

“I don’t see the U.S. overtaking China on a consistent basis,” said Amrita Sen, chief oil economist for Energy Aspects Ltd. in London. “Especially since China now has sustainably higher crude demand from teapot refineries.”

–With assistance from Sarah Chen. To contact the reporter on this story: Dan Murtaugh in Singapore at [email protected] To contact the editors responsible for this story: Ramsey Al-Rikabi at [email protected] Aaron Clark, Alpana Sarma

 

 

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