Australia

• Region: Australia
• Topics: Decommissioning
• Date: May, 2021

The Australian government has come under fire after it announced, in its 2021-22 budget, a levy to cover the cost of decommissioning facilities around the Lamarinaria-Corallina oil fields in the Timor Sea.

In 2019, the 170,000 bpd Northern Endeavour floating production storage and offtake (FPSO) was shut down by the National Offshore petroleum Safety and Environmental Management Authority (NOPSEMA) after an immediate threat to health and safety was found at the facility, caused by structural corrosion.

The task of decommissioning the infrastructure fell to owners Northern Oil & Gas Australia (NOGA) but, in late 2019 the company went into liquidation and so the facility has been abandoned, with the national government forced to maintain the facility. At the end of 2020, the government decided it was finally time to push the facility into retirement, announcing it would take on responsibility to decommission the FPSO and all related infrastructure.

The estimated cost of such an undertaking is an eye watering US$200mn and, to help cover this, the Australian government has now issued a levy to the oil and gas industry to help foot the bill.

The announcement has gone down poorly and the Australian Petroleum Production and Exploration Association (APPEA) Chief Executive, Andrew McConville, has led the criticism against the government. McConville was outraged that many companies that have never been involved with or benefited from the project will have to help pay, and noted such a decision had the potential to hold back Australia’s economy and the 80,000 jobs the industry supports.

McConville said, “Tonight’s announcement of a new levy on the entire (offshore) oil and gas industry is a terrible precedent and could have serious repercussions to Australia’s economy and to jobs. Everyone agrees that the Northern Endeavour needs to be decommissioned and the costs managed, but there are a number of ways that the government can do so without risking undermining investment confidence in the oil and gas industry.”

The Chief Executive added that there were other options still available, such as making the government’s current management of the operations more efficient, reducing the cost of decommissioning through collaboration, and looking at alternative funding such as selling the asset or accessing PRRT credits.

While leading the charge, McConville did note that he was glad there will be extra consultation where APPEA will be able to put forward alternatives that the government should consider to meet the costs of decommissioning. He said, “We stand ready to work with the government to look at how best to manage the decommissioning of the Northern Endeavour.”

• Region: Australia
• Date: Apr, 2021

Cooper Energy have, in their most recent quarterly report, confirmed more details for the abandonment work they have organised with Helix Energy Solutions in Australia with the announcement that they have acquired the Q7000 light well intervention rig to decommission the infrastructure in the Basker, Manta and Gummy (BMG) fields.

Earlier this year, David Carr, Senior VP of International Business at Helix Energy Solutions was joined by a host of panellists for the OWI webinar on decommissioning in Australia, where discussions focused on the substandard state of decommissioning in the region. In the session, Carr said that Cooper Energy had selected the Q7000 to perform operations for them in Australia in 2022, a move which they hoped would be the catalyst for getting on top of the decommissioning project in the country.

Cooper Energy have now confirmed this work in more detail with the announcement that the Q7000 will enter Australia waters with the first task of carrying out the decommissioning of the BMG fields, located in the Gippsland Basin. This will involve the decommissioning of seven wells and associated subsea infrastructure (pipelines and control umbilicals).

The Helix Q7000 Safety Case, a key permissioning document, has been submitted to the regulator (NOPSEMA) and is currently under review. The plan is that other regulatory documentation, including the Environment Plan and Well Operation Management Plan, will be submitted in Q4 FY21.

The BMG abandonment project is currently in the Front End Engineering Design (FEED) stage, with activities focused on selecting optimal methodologies and technologies for safe and cost-effective delivery of the decommissioning objectives. Details of scope of works, timing of execution and cost estimates will be announced at the final investment decision (FID), which is being considered in FY22.

The Q7000

The Helix Q7000 light well intervention rig has been specifically designed and built for intervention on subsea wells and abandonment activities. It is one of the newest vessels of its type, and benefits from the latest technological advances in well intervention, bolstered by its participation in the Subsea Services Alliance and array of equipment provided by Schlumberger. Its features include:

-IMO-certified Class 3 Dynamic positioning System

-Intervention Riser System, IRS 6, designed by Helix which enables access to both vertical and horizontal subsea trees in depths from c.85m to c.3000m

-Variable load capacity of c.3,000t

-ITF (Integrated Tension Frame), IRS maintenance tower, allowing for walk-to-work and safe access to well control equipment

-Large flush deck with skidding system for well intervention support equipment and tubular storage. Increasing operability by reducing reliance on offshore cranes

-Below deck twin work class ROV systems with harsh weather deployment capability

-Bulk fluids storage and pumping systems

-Wireline, Slickline, coiled tubing and cementing pumping spreads (Schlumberger).

• Region: Australia
• Date: Apr, 2021

Santos, as operator of the Barossa joint venture, has announced that a final investment decision (FID) has been taken to proceed with the US$3.6bn gas and condensate project, located offshore Australia.

The Barossa FID also initiates the US$600mn investment in the Darwin LNG life extension and pipeline tie-in projects, which will extend the facility life for around 20 years. The Santos-operated Darwin LNG plant has the capacity to produce approximately 3.7mn tonnes of LNG per annum.

Barossa is one of the lowest cost, new LNG supply projects in the world and represents the biggest investment in Australia’s oil and gas sector since 2012. It is estimated the project will create around 600 jobs during the construction phase and a further 350 jobs throughout the next 20 years of production at the Darwin LNG facility.

The Barossa development will comprise a Floating Production, Storage and Offloading (FPSO) vessel, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline. First gas production is targeted for the first half of 2025.

At the end of last year, Santos announced the tolling arrangements had been finalised for Barossa gas to be processed through Darwin LNG and that Santos had signed a long-term LNG sales agreement with Diamond Gas International, a wholly-owned subsidiary of Mitsubishi Corporation, for 1.5 million tonnes of Santos-equity LNG for 10 years with extension options.

Santos has also signed Memoranda of Understanding with SK E&S and Mitsubishi to jointly investigate opportunities for carbon-neutral LNG from Barossa, including collaboration relating to Santos’ Moomba CCS project, bilateral agreements for carbon credits and potential future development of zero-emissions hydrogen.

A big step forward in the Santos strategy

Managing Director and Chief Executive Officer of Santos, Kevin Gallagher, said the FID on Barossa was consistent with Santos’ strategy for disciplined growth utilising existing infrastructure around the company’s core assets.

Gallagher commented, “Our strategy to grow around our five core asset hubs has not changed since 2016. As we enter this next growth phase, we will remain disciplined in managing our major project costs, consistent with our low-cost operating model. As the economy re-emerges from the Covid-19 lockdowns, these job-creating and sustaining projects are critical for Australia, also unlocking new business opportunities and export income for the nation. The Barossa and Darwin life extension projects are good for the economy and good for local jobs and business opportunities in the Northern Territory.”

“Less than a year since we completed the acquisition of ConocoPhillips’ northern Australia and Timor-Leste assets and despite the global economic impact of a once-in-a-hundred-year pandemic, it is a great achievement to have extended the life of Bayu-Undan following the approval of the infill drilling programme and now to have taken FID on the Barossa project. I’d like to thank the Australian, Northern Territory and Timor-Leste governments, our joint venture partners and our customers for their support. I am delighted to welcome our Barossa joint venture partner SK E&S as a partner in Bayu-Undan and Darwin LNG and appreciate their support for today’s Barossa development decision,” Gallagher added.

• Region: Australia
• Date: Mar, 2021

Santos has awarded a major contract to BW Offshore (BWO) for the construction, connection and operation of the Floating Production, Storage and Offloading vessel (FPSO) for the Barossa gas field, located 300 km offshore Darwin.

Barossa will be developed via the FPSO with six subsea production wells, in-field facilities and a gas export pipeline tied into the Bayu-Undan to Darwin pipeline system that supplies gas to Darwin LNG. Barossa production is expected to commence in the first half of 2025 and will provide the next source of gas for the existing Santos-operated Darwin LNG plant once current reserves from the Santos-operated Bayu-Undan field in the Timor Sea have been depleted.

The FPSO

The unit for the Barossa gas field will be a large FPSO with processing capacity for up to 800mn cu ft per day of gas and design capacity of 11,000bbl per day of stabilised condensate. It will be turret moored with a newbuilt hull based on BWO’s RapidFramework design.

“Our skilled project execution organisation, experience from the Catcher project and working with well-known suppliers and yards, positions us to efficiently design, construct and deliver the newbuild FPSO for Barossa using the BW Offshore RapidFramework design,” said Marco Beenen, CEO of BWO.

The FPSO will be built in South Korea and Singapore before being towed and permanently located in the field. Condensate will be stored on the FPSO for periodic offloading.

One of the lowest LNG cost of supply projects in the world

The FPSO services contract is subject to a final investment decision (FID) on Barossa and represents the largest capital expenditure component of the approximately US$3.6bn Barossa offshore gas and condensate project to backfill Darwin LNG. The contract contains an upfront pre-payment and an option to buyout, and achieves an overall reduction of approximately US$1bn in capital expenditure.

Managing Director and Chief Executive Officer of Santos, Kevin Gallagher, commented “The decision to proceed with an FPSO services contract maintains a low ongoing operating cost while engineering enhancements have significantly reduced the project’s carbon footprint. This reduction in capital expenditure makes Barossa one of the lowest cost of supply projects in the world for LNG and will provide new supply into a tightening LNG market.”

Santos currently holds a 62.5% operated interest in the Barossa joint venture along with partner SK E&S. A final investment decision on the Barossa project is anticipated in the coming weeks with first gas targeted for the first half of 2025.

• Region: All
• Date: Mar, 2021

Expro Group (Expro), an international oilfield service company, has signed a three-year agreement with global vessel provider FTAI Ocean LLC (FTAI Ocean), a subsidiary of Fortress Transportation and Infrastructure Investors LLC, for the supply of the DP3 M/V Pride well intervention vessel to provide full light well intervention (LWI) services to the subsea oil and gas sector.

FTAI Ocean is a leading marine services provider to the international offshore energy industries. Its expertise includes well intervention, subsea, umbilicals, risers and flowlines (SURF), offshore construction, inspection, repair and maintenance (IRM), remotely operated vehicles (ROVs) and survey and positioning services.

Expro, a premier well flow optimisation service provider, already maintains a leading position in the subsea landing string and well intervention markets, enhanced by its Riserless Well Intervention (RWI) and Intervention Riser System (IRS) equipment supply.

The new exclusive alliance, creates a full service offering for the riserless and riser-based well intervention and P&A markets, providing all marine, ROV, well intervention, wireline, e-line, coilhose, subsea well access, hydraulic intervention, well planning, execution and offshore well management by a single supplier using one contracting entity. The agreement will allow both companies to expand their capabilities and resources to deliver a fully integrated intervention package to the industry.

Expanding capability through collaboration

Graham Cheyne, Vice President of Well Access and Subsea at Expro, commented, “This partnership is a significant step forward for both companies. It will strengthen our position in the subsea well access and P&A markets combining our efforts to provide a bespoke project-specific complete subsea intervention package to meet our customers’ exact requirements.”

“The new alliance and technology offering were paramount in Expro’s recent five-year contract award for the supply of light well intervention services for the Chevron-operated Gorgon facility, offshore Australia.”

“We have introduced the first fully integrated alliance package to the market. This not only enhances our LWI offering but represents Expro’s strong and continued commitment to safety through reduced risks, lower operational costs, and greater efficiencies for our customers,” Cheyne added.

Jon Attenburrow, Managing Director of FTAI Ocean, said, "We are very pleased to be working with Expro, a world leader in well flow technology, with a global footprint and strong track record in subsea well intervention. We look forward to collaborating with Expro to offer clients the highest calibre of subsea intervention services on a global basis.”

Supported by innovation

Both services and technologies will be deployed under the alliance, and will be supported by the introduction of FTAI Ocean’s innovative well intervention smart tower system, which will expand the alliance’s LWI vessel services with the provision of both riser and riserless equipment and services.

Expro and FTAI Ocean will offer the new integrated smart tower system, which has been designed, tested, and classed to DNV standards. The system, operational in water depths up to 1,500m in riser mode and 2,500m in riser-less mode, will be installed on the flagship DP3 M/V Pride Offshore Construction Vessel.

• Region: Australia
• Date: Mar, 2021

Carnarvon Petroleum Limited (Carnarvon) has announced that the Noble Tom Prosser jackup drilling rig has been contracted to drill the Pavo-1 and Apus-1 exploration wells in the Dorado Field in the Bedout basin offshore western Australia.

The drilling programme is expected to commence in late 2021 with the Pavo-1 well and will be immediately followed by Apus-1. Both prospects hold the potential to materially increase the aggregate development resource for the Dorado field if successful with the Pavo-1 well targeting 101mnboe and Apus-1 targeting 306mnboe.

Both of the exploration targets also have the potential to be tied back to existing infrastructure on the Dorado field which could provide significantly enhance economic outcomes, minimise additional capital investment requirements and shorten time periods to first production from the tie back fields.

With the drilling rig contracted, the operator will now proceed to secure the remaining equipment, services and approvals required to commence drilling operations

Managing Director and CEO of Carnarvon, Adrian Cook, said, “Given the potential resource size and development aggregation benefits, these two drilling targets provide very attractive and meaningful opportunities for Carnarvon. This news in locking in this rig is another clear point of progression in the advancement of the world class Bedout Basin. We are looking forward to an exciting year ahead with multiple drilling operations progressing to plan as well as the advancement of our Dorado development pre-FEED and FEED activities.”

Repeating history?

The Noble Tom Prosser jack-up drilling rig was previously used by Carnarvon and its operating partner in 2019 on the Dorado-2 and Dorado-3 appraisal wells and the operators will no doubt be hoping for a repeat of fortunes; Dorado-2 operations encountered 85m of net reservoir, a discovery far more significant than original estimations, while Dorado-3 initially discovered confirmed hydrocarbons in three reservoirs and returned strong results in the subsequent flow tests with the Caley reservoir achieving a maximum measured rate of approximately 11,100bbl per day and 21mn cu ft of associated gas per day.

• Region: Australia
• Topics: All Topics
• Date: Nov, 2020

• Region: Australia
• Topics: All Topics
• Date: Dec, 2020

• Region: Australia
• Topics: All Topics
• Date: Jan, 2020

Hear Woodside’s view of the Australian well intervention market, focussing on the characteristics which make Australia a unique place to conduct well work.

• Region: Australia
• Topics: All Topics
• Date: Jan, 2020