Gain insight into the growing Integrated Well Services Market in the Asia Pacific in this bespoke report by Offshore Network
Petronas has awarded Block SB405, offshore the coast of Sabah, Malaysia, to ConocoPhillips East Malaysia Limited (COPEM) a subsidiary of ConocoPhillips and Petronas Carigali (PCSB). The award of this exploration block, which has an area size of 5,857 sq km in water depth of up to 100m, is expected to bolster exploration activities off the coast of Sabah following the opening of more block investment opportunities in the country.
COPEM is the operator for Block SB405 PSC, with a participating interest of 85%, while PCSB holds the remaining 15%. SB405 is the new addition to COPEM’s existing interests in five production sharing contracts (PSC) in Malaysia, which are Block J, G and Kebabangan located off the coast of Sabah; and SK304 and WL4-00 located off the coast of Sarawak.
Mohamed Firouz Asnan, Senior Vice President of Malaysia Petroleum Management, commented, “The entry of COPEM with its world class proprietary seismic technology into Block SB405 is expected to enhance the hydrocarbon resource potential off the coast of Sabah. This is an area that has a proven working petroleum system with previous discoveries such as Kuda Terbang and Nymphe fields. At the same time, the new investment of COPEM in Block SB405 represents enhanced confidence of foreign investors in the upstream sector in Malaysia.”
“The partnership with PCSB provides that winning combination to support the potential development of the resource within the North East Sabah basin area upon successful commercialisation of the discoveries. Under our right asset, right player strategy, we hope to unlock the full potential of the hydrocarbon resources in Malaysia towards successfully delivering clean and reliable energy to our customers in Malaysia and abroad,” he added.
More blocks on offer
Alongside signing the PSC with COPEM, Petronas has also announced that it will be offering 13 offshore exploration blocks offshore Malaysia at the upcoming Malaysia Bid Round (MBR) 2021 with six discovered fields included to incentivise investors.
Mohamed Firouz Asnan said, “MBR 2021 will feature significant enhancements which include larger block areas coupled with flexible bidding options and low entry costs. We will also be offering relatively new fiscal terms to be applied in the PSCs such as enhanced profitability (EPT) for the shallow water blocks, the late life assets (LLA) and small field assets (SFA) which are designed to match the risk and rewards of the investments with the type of assets available.”
“These terms have been formulated based on the feedback from industry players, taking into account market conditions, further strengthening Malaysia’s position as the oil and gas hub in a growing and thriving market of South East Asia. Besides improved fiscal terms, Malaysia offers good network connectivity by way of established world-class infrastructure which enables ease of monetisation,” he added.
In recent months Malaysia has shown high potential for future oil and gas development offshore with fresh discoveries, such as PTT Exploration & Production announcing its biggest find to date in the SK 410B block, set to boost already high production levels of natural gas and oil. The news distributions by Petronas will only serve to bolster and consolidate the country’s position as one of the highest producing countries in Asia.
For more than 25 years Grant Pierce has worked for onshore and offshore service and oil and gas operations across the globe, accruing an extensive knowledge base in this time. He sat down with Offshore Network to divulge his insights on the offshore oil and gas industry in the aftermath of the Covid-19 pandemic, what the associated media is failing to cover, and which regions could potentially be hotbeds for well intervention operations in the future.
You have been vocal about media outlets lacking in terms of future well intervention and plugging and abandonment (P&A) work. Could you elaborate on this?
Pierce: “I do not think there has ever been a large focus on upcoming work that is happening unless it is a big contract win - that is when you will hear about work being publicised. But you never really see publications on campaigns coming up until they are done, then you might hear about three or four extra jobs that service companies have done - they normally come out in a group.”
“You might hear a job about Helix and a client in the Gulf of Mexico and then you may hear something about C-innovation in the same region a few weeks later but it has never really been consistent. Of course these days the focus has been more on clean tech and politics; that is what is in the media these days as that is what generates numbers.”
It does seem that P&A work is somewhat avoided by the industry, but with green targets and sustainability increasingly on the agenda do you think we will see more P&A work in the future?
Pierce: “Absolutely there will be more work pushed forward. They were talking about it during the OWI Australia conference on 9 February. Government regulators are pushing this work to be done. Definitely in Australia NOPSEMA had given deadlines and were reducing them. That is the kind of thing that is happening – this work is being pushed forward rather than back by the government and regulators are saying we have to get this done now. For sure P&A is being focused on globally right now and will feature more in the future.”
Do you have any suggestions to increase P&A efficiency to get more of this work done in the future?
Pierce: “Really just sharing from other areas in the industry. Taking lessons from the UK and applying into them Africa, or from Africa into Australia. Of course the same model cannot work everywhere; we work differently in different countries and regions. The regulations are more stringent in some places, for example, and so it is difficult to apply the same cookie cutter model everywhere.”
“One other method is collaboration to share vessels. They are speaking about it now in more areas, but it has recently become more normal in Africa to bring in a well intervention vessel and share it between operators. By doing this one operator is not taking all the cost - they have a schedule where they work for one operator and then they will move onto another, sharing the cost of the vessel. This keeps the vessel working in the country rather than having a huge cost to come in, then huge cost to go back home, then the vessel remaining idle for two months and then going back out to the same area for a different client.”
Looking to the future, are there any regions we should be keeping our eye on over the next few years for development or P&A work?
Pierce: “The problem with new frontier places is sometimes costs can be prohibitive and so the company wouldn’t make a lot of money on long term investments. Because of this there are fewer frontier areas left. However, there is some focus on some places in Africa, such as Senegal, some regions like Guyana and Suriname and even around the Bahamas and South America are gaining interest. Brazil is probably the next cost-efficient area to do work in so there will probably be more development there – I expect that area to pick up.”
“In terms of P&A, there is work everywhere. It is really huge in Thailand and Malaysia with a lot of hydraulic workover units doing loads of P&A work and this is ongoing all the time. There are new units and new work over units constantly being built to do that work. Additionally, Australia is ramping up in a serious way and I would also highlight P&A work in Mauritania, Angola, Nigeria, Ghana, and in the Gulf of Mexico.”
Daniel Yergin has suggested that the term energy transition is used a lot without it being properly understood and said ‘you can’t just change the system overnight’. Do you have any thoughts on this and what it means for the future of offshore oil and gas?
Pierce: “I am in full agreement. What fossil fuels can do is astounding. For instance, they assist every other technology that we can imagine with more than 6,000 products made from by-products of petroleum. It is very hard to think that we can just un-marry from fossil fuels. The use will start going down with people becoming more attuned to using alternative energy technologies, but I don’t think there will be a complete transition within the next thirty years.”
“A lot of energy companies are responding to government initiatives and saying ‘Okay if you say we cannot do it we will distance ourselves’ but they are still buying up acreage in South Africa and Suriname. It still goes on; it can’t just go away tomorrow. It is something that will have to be worked on over the next fifty years.”
“The key is to reduce emissions produced by the industry and work in a more sustainable way such as reducing the amount of equipment that is being moved around. But we cannot stop development. If we shut things off tomorrow we would be where we were one hundred years ago.”
You are very passionate about the well being of offshore workers, which has been at risk due to the pandemic with people having longer stays offshore. What is the best way to treat this problem and ensure employees are protected?
Pierce: “More collaboration and sharing ideas and ways of doing business between service companies, operators and any contractors involved is needed to prevent people being stuck for long periods of time. I know that regionally, the upper management at Petronas seem to have done a good job at managing their bridging documents ahead of time and changing those documents to accommodate the situation. They worked together with their partners to better utilise the time and people in a more efficient way to minimise negative effects. They were definitely a company that stayed on top of their business and kept their people moving despite it being very difficult to get employees around with all the quarantine restrictions in Malaysia. They were a very good example in this regard.”
“I know as well that in Australia even though they have tight control orders (a person cannot move between states without major procedures) they have done a good job there, with Cooper Energy for example still managing to facilitate work in the region.”
Maersk Drilling has secured a contract from Korea National Oil Corporation (KNOC) for the drillship Maersk Viking to drill one exploration well in Block 6-1 offshore the Republic of Korea. The contract is expected to commence in June 2021, in direct continuation of the rig’s previous work scope, with an estimated duration of 45 days. The contract value is approximately US$14.5mn, which includes mobilisation and demobilisation fees.
Morten Kelstrup, Chief Operating Officer of Maersk Drilling commented, “We are pleased to be awarded this contract with a new customer in the form of KNOC for their first-ever drillship operation and are confident in our ability to quickly start up operations in Korean jurisdiction after Maersk Viking moves on from its previous job. The rig and its crew have shown an impressive ability to always deliver safe and efficient operations, even during this challenging period marked by a global pandemic.”
Maersk Viking
Maersk Viking is a high-spec ultra-deepwater drillship vessel which has a maximum drilling depth of 12,000m and a maximum water depth of 3,657m. It boasts a variety of features such as a 3.5t pipe handling knuckle boom crane; five National 14-P-2200, 7500psi HP single-acting triplex mud pumps; the TDX 1250 system rated for 7500 psi and 2680 hp; and accommodation to allow for up to 230 personnel on board.
Delivered in 2013, the Maersk Viking has a wealth of experience after conducting jobs for ExxonMobil, Aker Energy, AGM and POSCO in a variety of different regions such as the Gulf of Mexico, Ghana and Myanmar. Currently, the vessel is mobilising for a campaign in Brunei Darussalam after Brunei Shell Petroleum Company exercised the option to add exploration drilling work. This will see the vessel start work in May 2021 for an estimated duration of 35 days continuing on from the rig’s previously agreed work scope. The contract value extension of these operations is approximately US7.1mn.
Maersk in 2021
The KNOC contract is the latest of a number of those received by Maersk Drilling in 2021 with the company most notably also securing a two-well contract for the low emission rig Maersk Integrator with Aker BP in the North Sea; an agreement for the deepwater rigs Maersk Valiant and Maersk Developer for exploration and appraisal projects offshore Suriname with Total E&P Suriname; and deploying Maersk Resolve to drill a new well for Spirit Energy in the North Sea.
Genoa Black connected with Wouter Mezger, Commercial Director at Barge Master, as they discussed the recent success of the Deep Water Floating Drill Operation after the project claimed Most Innovative Solution at the OWI Global Awards 2020.
The Barge Master Deep Water Floating Drill Operation uses motion capture to eliminate vessel motions, allowing the operation of machinery with the same precision as onshore even in adverse weather conditions By integrating their BM-T700 motion compensation platform and the reverse circulation drill rig from Large Diameter Drilling (LDD) Barge Master has completed the installation of seven anchor mooring piles for a Catenary Anchor Leg Mooring (CALM) Buoy as well as a world first: drilling operations from a diving support and construction vessel in water depths of more than 270m.
Behind the projects success:
Mezger opened by thanking the judging panel for their decision and commented, “We think it has been recognised because typically drilling of this kind is usually carried out by a Jack-up barge [which are typically expensive to mobilise, hard to manoeuvre and limited by water depth and soil conditions]. We are filling in the gap. By integrating the motion compensated platform with an existing well intervention drill unit or technology a new innovative safe solution was developed which can be implemented on many other projects, moving the whole industry forward.”
When asked about the value this holds for customers Mezger responded, “The method of operation and the combined approach of using the Barge Master motion compensated platform and existing drill rig or intervention unit will bring great value to the oil and gas market and opens up new possibilities to perform well intervention on offshore wells in a safe and efficient way.
“The set up is a big step not just for the oil and gas market but throughout the marine industry where typical well intervention methods used by jack-up barges are not feasible in these water depths and require the need for a more costly floating drilling solution. We can bring a new cost effective solution that achieves the same end result.”
Why recognition was significant:
Mezger continued by commenting that receiving the award was recognition for the project and the team that had worked so hard on innovative solutions and confirmed the company’s belief in the product.
Reflecting on 2020 and looking to the future:
The Commercial Director considered the lessons learnt across 2020 and how the company is preparing for 2021, he stated, “Our priority is always safety first. It is embedded in the culture of our organisation both in the office and operations offshore. In 2020 we faced some challenges. Implementing a new technology, we felt the ability to travel and showcase the product to the customers, with the ongoing activities, has made bringing this new solution to the market rather hard. For 2021 we have learnt to focus and target specific markets for our applications.”
There are no suggestions that the success of the Water Floating Drill Operation will dry up any time soon, with the OWI Awards judges noting that it is a ‘world’s first that is flexible for a wide range of operations’. Certainly Mezger believes the future is bright as he concluded, “With the award we have received industry recognition that will help us reach out to a broader spectrum of clients and help them open up even more to this new innovative solution.”
This month’s video demonstrates how certainty allows for better and faster decision making and evaluate the tubing conditions of multiple sub-sea completed wells pre-abandonment.
EV was requested by a global operator to perform a multi well campaign. EV’s Optis HD Electric line camera was used to inspect the tubing conditions of multiple sub-sea completed wells pre-abandonment.
Gain insight into the growing Integrated Well Services Market in the Asia Pacific in this bespoke report by Offshore Network
Access a detailed well intervention case study that utilised cutting-edge rigless, riserless technology. See the full report from Sapura Energy which covers the Browse Basin project that took place offshore Australia.
By Mark Plummer MSc BEng
Stuart Wright Pte Ltd’s (SW) CEO, Colin Stuart, and Well Engineer, Mark Plummer recently completed a one-year project supporting the Department of Natural Resources Mines & Energy (DNRME) in Queensland, Brisbane to perform a Well Programme Assurance Design and Construction Review (WEPA DCR) for high risk and complex wells.
The objectives of the WEPA DCR were to understand, by observation, how operators are meeting the relevant statutory provisions in the legislation; including subsidiary mandatory safety requirements, the Queensland Code of Practice and recognised industry standards. Consistent with the Queensland government policy, the Inspectorate is collaborating with the industry to promote the safety and technical standards for petroleum and gas operations.
Following consultation and dialogue with industry, seven (7) Operators were selected as suitable candidates for the well programme assurance review. The programme was conducted in three stages as outlined in Figure 1 below.
Figure 1 – WEPA Design & Construction Review Process
WEPA Stage 1 – Understand with the petroleum operator, their well design protocols and standards, and agree specific well selection;
WEPA Stage 2 – Engage in well design and planning process of the selected well programmes; and finally; and
WEPA Stage 3 – Oversee well construction against the plan in the well execution stage. In particular to carry out well barrier monitoring and validation using SW’s proprietary Right Time Barrier Condition (RTBC) well barrier monitoring system.
Well Design Phase Review Methodology
Through discussion between the Regulator and each individual Operator, eight (8) suitable candidate wells were identified for the Well Programme Assurance review. Subsequently, a copy of Operator standards and well specific documents (e.g. Well Basis of Design, Drilling Programme, Drilling Fluids Programme, Cementing Programme, Casing and Tubing Design, Well Barrier Programme) were provided by the Operator for review by Well Inspectors.
The design phase review methodology was as follows:
Well Construction Phase Review Methodology
Stuart Wright’s proprietary well barrier monitoring and validation system, RTBC, was used by DNRME to monitor drilling operations for selected wells. This exercise was the final stage for a given selected well, in DNRME’s WEPA DCR programme.
The system was used to assess each well for compliance, with their own standards and mandatory regulatory requirements. Specific barrier acceptance criteria were created in RTBC, which were extracted from Operator standards, the drilling programme and relevant legislation. Each barrier element during well construction was then assessed for reported validation, and assigned a traffic light colour (red, amber, green) rating depending on the result of the rating.
RTBC creates a Daily Integrity Report (DIR) capturing the barrier validation result.
The process of assessing compliance during well construction was as follows:
Figure 2A – Example Daily Integrity Report (Pg.1) – sent to Operator on a Daily Basis
Figure 2B – Example Daily Integrity Report (Pg.2) – sent to Operator on a Daily Basis
Key Findings
A range of useful findings arose from the WEPA study and, in particular, the use of RTBC to track barrier validation during well construction provided close monitoring and feedback which was beneficial to both the Regulator and Operator:
KF #1 – In general, the Operator standards compliance with mandatory regulatory requirements was good, but with individual exceptions which were fed back to Operators and improvement processes agreed.
KF #2 – Maintaining an overbalance margin to the bottom hole pressure (BHP) is a critical barrier during well construction. Operator standards for petroleum wells reviewed by DNRME could be further enhanced by stipulating a minimum overbalance to BHP requirement.
KF #3 – Several Operators did not achieve regulatory compliance with the minimum 70% standoff for casing centralisation in their well design. The primary reason cited for this non-compliance was that the centralisation modeling simulation called for large sections of the casing having 2 centralisers per joint to achieve the required 70% standoff and Operators opined that the risks associated with running this many centralisers outweighs the benefit.
KF #4 – During the WEPA study, DNRME noted that the Operator’s design and planning process was often completed very late and, in many cases, only a few days prior to well spud which has an impact on risk during the well construction phase.
KF #5 – 75% of the gas-producing petroleum wells reviewed during the WEPA study were designed with standard Buttress Thread Connections (BTC) or Long Thread Connections (LTC) in the production casing string, which is common practice, deemed to be adequate as reservoir pressures were less than 3,000 psi. For gas-producing petroleum wells, the selection of premium (gas-tight) connections would help to mitigate, over time, the risk of a leak path for hydrocarbon gas into the B-Annulus with associated consequences, though DNRME accepted that current industry standards support the common practice and the risk assessment approach currently used is valid.
KF #6 – The use of a barrier monitoring system demonstrated that Operators could not, in a limited number of cases, show compliance in all respects with their own standards and regulatory requirements during well construction given the conventions and format of the standard DDR reporting process. The Inspectorate had to review documents and data other than the DDR to complete the barrier validation picture.
KF #7 – The integrity reporting system used (RTBC) did give regulator and operator insight into escalating compliance risks. Furthermore, it allowed the Inspectorate to demonstrate in the captured database, a record that the operator is in compliance with regulation OR where they are not, it is transparent, and a flag raised.
KF #8 – The Daily Drilling Reports (DDR) focus is typically around performance and Occupational Health and Safety (OHS). However, no clear picture emerges in a typical DDR of an equal focus on well integrity and specifically loss of control risk.
Preliminary Conclusions of the WEPA Study
The findings and preliminary conclusions of the WEPA study were presented, on behalf of DNRME, by Colin Stuart at the Oil & Gas UK “Safety 30 – Piper Alpha Legacy: Securing a Safer Future” conference which was held in Aberdeen in June, 2018. A summary of the preliminary conclusions of the WEPA study is detailed below:
This project summary has been approved by DNRME.
Understand how the Completions Standardization Technical Committee (COMSTEC), comprised of members from Petronas MPM and regional operators and service companies are tackling three main operational inefficiencies: Packers, safety and flow valves and operational procedure.
In this article, we review the situation and prospects for the offshore well intervention market, with comment on best practice, based on a presentation at OWI APAC 2018 (Kuala Lumpur) by Dan Cole, McKinsey & Company.
Fahmi Ghaffar, Well Services Manager of PETROFAC shares the past three years of their well intervention experience to show the efficiencies and lessons learnt that have been noted during this period.
Agha Nadeem Durrani, Deputy Chief Engineer – Well Interventions from Pakistan Petroleum Limited shares a case study from a recent parted tubing campaign.
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