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aogdigital.com ▼
July-August 2015
AS IAN O I L & GAS
AOG
EPCIC challengesoffshore Myanmar page 18
Qatar to face risingLNG competition page 14
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EDITOR’S COLUMN
5 2Q 2015 losses and cutbacksA review of 2Q 2015 net losses and fur ther spending cutsannounced by international oil and gas companies alsofocused in Asian explorations.
REGIONAL UPDATES
6 BriefsPetroVietnam and Murphy Oil to jointly explore oil andgas reserves in Vietnam and more news from Australia,China, Indonesia, New Zealand, Philippines and theMiddle East.
FEATURES
10 Filipinos still in demand abroadMature markets in the Middle East and Asia continueto have a steady demand for Filipino oil and gasprofessionals.
12 Making the most of M.O.S.T.Weatherford’s Cham Soon Hoe and Aung Din explainhow operators in Vietnam and Australia have benefitedfrom the Mechanical Outside-Latch Single Trip (M.O.S.T)system during subsea well abandonments.
14 Qatar LNG challengedWith more competitors entering the global gas market,Qatar’s LNG exports to Asia could be further tested.Audrey Raj reports.
16 Fabrication scales new heightsSingapore-headquartered TRIYARDS continues to expandits fabrication expertise. Audrey Raj explains.
18 COOEC goes internationalAudrey Raj speaks with COOEC about the group’s firstinternational EPCIC project challenges and more.
GEOFOCUS: CHINA
20 Protecting IPR in ChinaTo remain competitive in the Chinese market, foreign oiland gas enterprises must protect their intellectual propertyrights in China, explain Brad Chin and Kevin Tamm ofBracewell & Giuliani LLP.
24 China eyes Russian reservesRussia’s decision to allow Chinese investors acquirecontrolling stakes in its oil and gas fields come withpotential risk. Eugene Gerden investigates.
PRODUCTS & TECHNOLOGY
26 SolutionsNew tools and software to improve performance,production, and modeling.
SPOTLIGHT
27 Powering energy managementDavid Farmer, Eaton’s vice president of global projects foroil and gas discusses energy efficient alternatives for oiland gas sustainability in Southeast Asia.
COMPANY NEWS
28 Activity OneSubsea and Subsea 7 inked an agreement to jointlydeliver integrated subsea development solutions, plusother regional news.
FACTS & FIGURES
30 Numerology A capsule view of interesting industry statistics.
Contents
On the cover
Onshore construction of the
Zawtika EPCIC project is in its
final stages, preparing for off-
shore instal lation at COOEC’s
Tanggu fabrication yard fea-
tured in this issue’s cover.
Read more on page 18.
Photo from COOEC .
ao g d i g i t a l.co m
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J u l y - A u g u s t 2 0 1
5
A S IA N
O I L & G
A SAOG
E P C I C c ha l l e n g e
s
o f f s h o r e M ya n
ma r pa ge 1 8
Qa ta r t o fa c e r
i s i n g
L N G c o m p e t i t i
o n pa ge 1 4
16
10
12
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R e g i s t e r
T o d a y !
Contact InformationSponsorship & Exhibits:Gisset CaprilesTel: +1 713-874-2200 [email protected]
Conference:Jennifer GrandaTel: +1 713-874-2202 [email protected]
Subsea Innovation and Efficiency Delivering Economic Success
August 11-13, 2015
www.deepwaterintervention.com
forum
Global
5th Annual
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Editor’s Column
2Q 2015 losses and cutbacksAlthough consumers around the world have welcomed therecent slump in oil costs, as prices stay low it is continu-ing to hurt oil and gas explorers, as drilling operations become
more unprofitable.
As AOG goes to press, several international oil and gas
companies also involved in Asian explorations announced 2Q
2015 net losses and cutbacks to stay afloat the sinking envi-
ronment.
US-based Murphy Oil reported a net loss of US$73.8 mil-
lion in 2Q 2015, down from net income of $129.4 million in
2Q 2014. The firm, which is also focused in Southeast Asian
exploration, said loss from continuing operations this quarterwas $89 mill ion, compared to a profit of $142.7 million earned
in 2Q 2014.
In Malaysia, during 2Q, Murphy completed a five-well drill-
ing program at the Belum field in shallow water offshore Sar-
awak, and spud oil wells at the Permas shallow water develop-
ment. Murphy is looking to tap into Vietnamese reserves with
PetroVietnam to jointly develop the Block B gas project in the
Malay Tho Chu basin and some blocks in the Cuu Long basin.
Canada-headquartered Husky Energy’s profit plunged ap-
proximately 80% in 2Q 2015, due to weaker Canadian dollars,
lower oil price and corporate tax hike, the company said.
Net earnings were CA$120 million, compared to CA$628
million a year ago, while cash flow from operations wereCA$1.2 billion, as opposed to CA$1.5 billion in 2Q 2014.
According to CEO Asim Ghosh, Husky drew strength from
its diverse portfolio and fixed-price gas sales in the Asia Pacif-
ic region this quarter. Combined gross gas sales volumes from
the group’s Liwan gas project offshore China, including the
Liuhua 34-2 field, averaged 295 MMcf/d, up about 13% from
1Q 2015. Husky is on track to achieve its CA$400-600 mil lion
target in cost savings this year, with approximately CA$575
million locked in to date.
Supermajor Royal Dutch Shell, operator of the Gumusut-Ka-
kap development in Malaysia, earned $3.4 billion in 2Q 2015,
compared to $5.1 billion same time last year.
Whereas its Gumusut-Kakap joint venture partner, Houston-headquartered ConocoPhillips reported a net loss of $179
million in 2Q 2015, compared with 2Q 2014 earnings of $2.1
billion. ConocoPhillips will lower 2015 capital expenditure
guidance from $11.5 billion to $11 billion and operat ing cost
guidance from $9.2 billion to $8.9 billion.
On the other hand, Shell said it would cut 6500 jobs as part
of cost cutting plans, plus reduce about $7 billion in capital
investment, all so to prepare for the prolonged downturn.
US major Chevron, which also partners with Shell in the
Malampaya deepwater gas-to-power project in the Philippines,
plans to axe 1500 jobs to slash cost by $1 bill ion.
Chevron’s earnings for 2Q 2015 were $571 million, while 2Q
2014 saw an income of $5.7 billion. Sales and other operat ing
revenues were $37 billion, compared to $56 billion a year ago.
Chevron has been moving to shed assets in the region. In
March, Chevron completed the sale of the company’s 50%
interest in Caltex Australia, and followed that sale in June by
shedding its Vietnamese assets, which included acreage off
the country’s continental shelf and an offshore pipeline proj-
ect, in a deal struck with PetroVietnam. Last year, Chevron
opted to sell its Cambodian subsidiary to Singapore’s KrisEn-
ergy for $65 million.
Chevron CEO John Watson noted that the upstream business
was particularly hit hard, as lower prices reduced revenues
and triggered impairments and other charges.“We’re getting our cost structure down, through renegotia-
tions across the supply chain and by sizing our contractor and
employee workforce going forward. Project execution on the
Gorgon and Wheatstone Australian LNG projects is a priority
for us,” Watson said.
Despite the sharply lower oil price, France’s Total had a net
income of $3.1 billion, a decrease of only 2% compared to the
same period last year. The group expect s to exceed its 2015
objective to cut operating costs by $1.2 billion in 2015 and
reduction of 2015 capex to $23-24 billion.
Since the beginning of 2Q 2015, Total started first produc-
tion at the Termokarstovoye gas field in Russia, achieved
positive appraisal of the Elk-Antelope gas fields in Papua NewGuinea, plus opened its new lubricant plant in Singapore.
In Russia, UK supermajor BP has also made some progress.
In June, an agreement was inked to purchase 20% interest in
Rosneft’s Taas-Yuryakh Neftegazodobycha (Taas) subsidiary,
creating a new joint venture in East Siberia.
However, BP reported a replacement cost loss for the quarter
of $6.3 billion, citing low oil prices and settlement charges re-
lated to the 2010 Deepwater Horizon oil spill, which occurred
in the US Gulf of Mexico. AOG
Audrey Raj
Editor
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Regional Briefs
AS IAN O I L & GAS
AOG
July · August 2015
Australia
• TRANSERV SET TO
SPUD WARRO FIELD
Transerv Energy is set to drill the
onshore Warro gas field, which aims to
unlock 8-10 Tcf of potential gas reserves.
Located 200km north of Perth, Warro
is 30km from the Dampier-to-Bunbury
and Parmelia pipelines, which will carry
gas into Western Australia’s southwest
gas market.
Warro-5 and Warro-6 wells will be
drilled 3.5km to the south and 1.5km
southwest, respectively, of the previ-
ous wells on the giant Warro field to
4250mRT total depth.
• AWE REDUCES YOLLA RESERVES
New data obtained from the recently
drilled Yolla-5 and Yolla-6 development
wells has resulted in a reduction in the
estimated original gas in place for the
Yolla field, says operator Origin Energy.
Joint venture pa rtner, AWE’s managing
director Bruce Clement, says the updated
reserves at Yolla will result in less gas
production later in the field life.
“But overall it is not expected to have
a material impact on production or cashflow during the next three to four years,”
he says.
AWE has chosen to adopt the prelimi-
nary reassessment of the operator and re-
duce its share of 2P reserves for the Yolla
field by 5.5 MMboe, down to 13 MMboe.
China
• CHINESE YARD BAGS UAE ORDER
Chinese shipbuilder, SINOPACIFIC
Shipbuilding Group won the bid for the
construction of nine anchor handling tug
supply (AHTS) vessels from Abu Dhabi
National Oil Co. (ADNOC) and its wholly
owned subsidiary, ESNAAD.
The winning design was the SPA80A,which is an AHTS with elect ric propul-
sion system and a bollard pull of 80mt
designed by Shanghai Design Associates,
the SINOPACIFIC OSV design team.
All nine vessels scheduled for deliv-
ery in 2017 will be able to operate under
complex conditions of shallow water,
high salinity, high temperatures and
high humidity in the Persian Gulf.
• SINO GAS TO
COMMISSION FIRST GAS
Construction of the Linxing CentralGathering Station (CGS) is now com-
plete and commissioning of first gas is
expected to kick-start, reports Sino Gas
and Energy.
This includes gathering lines for the
first batch of seven wells to be tied into
the Linxing CGS, including TB-1H the
first horizontal well dr illed in 2013 and
tested in 2014 at a rate of 4.93 MMscf/d.
Pilot gas sales from the Linxing CGS
are anticipated to commence following
completion of commissioning activities.
• CNOOC STARTS LUDA 10-1
Production has commenced at the Luda
10-1 comprehensive adjustment project,
in Liaodong Bay of Bohai.
The Luda 10-1 oil field sits in water ap-
proximately 30m deep.
In addition to fully utilizing the exist-
ing facilities of Luda 10-1, this adjustment
project has also built one wellhead plat-
form. There are currently 13 producing
wells producing approximately 3300bo/d.
The adjustment project is expected
to reach peak production of 6000 b/d in
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2016. CNOOC operates Luda 10-1 with
100% interest.
Indonesia• LION TO COMMERCIALIZE
GAS FIND
Lion Energy is looking to commercial-
ize its Lofin-2 gas discovery at the Seram
(Non Bula) production sharing contract
(PSC) in Eastern Indonesia.The Seram joint venture has suspended
the Lofin-2 appraisal well, that flowed gas
at about 17.8 Mcf/d, as a potential producer.
Results exceeded pre-drill expecta-
tions and confirmed a material discovery
for the company even with its 2.5% stake
in the Seram PSC.
• COOPER REVISITS SUMATRA
DRILLING PLANS
Cooper Energy has rescheduled its
drilling plans for the Sukananti KSO
in South Sumatra, Indonesia, whichcomprises of the Sukananti, Bunian and
Tangai fields.
The firm says the decision was made
to prioritize drilling of the Bunian-4
appraisal well, plus focus on appraisal
of the Bunian field reserves, which has
been identified to be hydrocarbon rich.
This includes the deferment of the
Tangai-5 development well drilling,
which had originally been scheduled to
follow Bunian-3.
Bunian-4 will be drilled on a deviated
trajectory to a subsurface target 380mfrom the surface location and 450m from
the Bunian-3 ST2 subsurface location at
the top of the TRM3 sandstone.
India• BG INDIA IN MUKTA-B PAYDAY
BG India achieved first oil production
from Mukta-B, a four-legged wellhead
unmanned platform in the offshore
Bombay basin.
BG alongside partners, Oil and
Natural Gas Corp. (ONGC) and Reliance
Industries are developing the Panna-Mukta oil and gas fields through well in-
tervention and infill drilling campaigns.
Pipelines have also been successfully
completed as par t of the project.
• L&T WINS ONGC EPCI
Mumbai-based L&T Hydrocarbon
Engineering bagged an offshore contract
from Oil & Natural Gas Corp. (ONGC)
valued at 2715 crores (US$420 million).
It encompasses the engineering,
procurement, construction and installa-
tion (EPCI) for the Bassein development
project offshore India.
The work scope includes one process
platform, compression facilities, one
nine-slot wellhead platform, topside
modification on existing platforms, as-
sociated subsea pipelines and one living
quarter platform in the Bassein field.
Malaysia• MEO, BROOKE IN MALAYSIAN E&PMEO Australia and Brooke Dockyard and
Engineering Work Corp.,will jointly bid on
oil and gas exploration opportunities with-
in Sarawak and the whole of Malaysia.
Under the agreement, MEO will pro-
vide technical and evaluation assistance
to Brooke, and in return Brooke will
fund the evaluation activities and the
exploration component of the joint bids.
At this initial stage, under the agree-
ment, Brooke will have a 75% participat-
ing interest and MEO a 25% participat-
ing interest.Brooke will bring Malaysian content
to MEO having access to local fabrica-
tion and construction capability, for both
onshore and offshore facilities.
Middle East• VALLIANZ WINS
MIDDLE EAST OSV
Vallianz Holdings has signed new
contracts valued up to US$458 million
with a national oil company (NOC) in the
Middle East.
This will see the Singapore-based firmlengthen the charter duration for 19 of
its offshore support vessels currently
deployed to this repeat customer.
It includes 15 anchor handling tug
supply vessels and four platform supply
vessels (PSV), which will continue to be
used by the NOC until June 2018, with an
option to extend for two more years until
June 2020.
This follows the company’s $300 mil-
lion deal to supply two self-elevating
platforms to be deployed from 3Q 2015
for a period of five years with anotherMiddle Eastern NOC.
New Zealand• MOSMAN OPERATIONS UPDATE
Mosman Oil and Gas provides operations
update of its Murchison, Petroleum Creek
and Taramakau permits in New Zealand.
Land access agreements are in prog-
ress with the Tasman District Council for
the Murchison permit, the firm says.
Geology and engineering works are
currently in progress, and the welldesign is being finalized as a 1200m
vertical well.
There are a series of formalities and
approvals to be completed before drill-
ing, which is still anticipated in 2015,
conditional on a number of matters,
including funding.
The Petroleum Creek permit has sig-
nificant potential, with focus now on the
larger deeper structures.
Drilling and flow tests on the Crestal
area demonstrated oil generation and
migration. The core data provided infor-mation on the Cobden Limestone, and
confirmed the reservoir properties.
The Taramakau permit surrounding
Petroleum Creek shares similar geological
characteristics, and prospective play types.
Next round of seismic acquisition is sched-
uled for later this year or early next year.
Philippines• MAERSK VENTURER HEADS TO
PALAWAN
Drillship Maersk Venturer will mobilize
to the Hawkeye-1 exploration well, off-shore Palawan basin in the Philippines.
Contracted by field operator Otto
Energy, the ultra-deepwater dril lship
will begin mobilization 31 July, accord-
ing to joint venture par tner, Red Emperor
Resources.
Red Emperor’s managing director,
Greg Bandy says, “this positive progress
would make the next few months very
exciting for shareholders, and we can
expect Hawkeye-1 to spud early August.”
Currently stacked in Labuan, Malaysia,
Maersk Venturer will take less than amonth to drill the well.
Malaysia• STEEL CUT FOR PETRONAS FLNG 2
Malaysian oil major PETRONAS celebrat-
ed the official steel cutting of its second
PETRONAS floating liquefied natural gas
(PFLNG 2) facility, designed for the Rotan
field, 130km offshore Sabah in Malaysia.
To be built at the Samsung Heavy
Industries (SHI) shipyard in South Korea,
the steel cutting signifies the beginning
phase of the hull and topsides of the
PFLNG 2 with a weight of 152,000 tonne.
Designed for deepwater operations in
water depths ranging from 500-1500m,
PFLNG 2 will have a production capacity of
1.5 MTPA and house up to 150 personnel.
The Block H project in Rotan field
offshore Sabah is sanctioned by operator
Murphy Oil and PETRONAS.
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Russia, a well was completed using
“openhole gravel packing” in a horizon-
tal section of 1000m.
Rosneft and Statoil plan to hold wells
testing and determine further prospects
and methods of PK1 layer development
based on the testing results.
Implementation of the project may
allow effective development of about 544
million tonne of geological oil in placeat the North-Komsomolskoye field in the
short term.
• PETROVIETNAM, GAZPROM
BOOST COLLABORATION
PetroVietnam and Russian energy com-
pany Gazprom inked an agreement to
jointly develop Nagumanovskoye and
Severo-Purovskoye fields in Russia.
The Nagumanovskoye field in the
Orenburg region has 5.8 Bcm of proven gas
reserves and approximately 1.6 million
ton of recoverable condensate reserves and960,000 ton of recoverable oil reserves.
The Severo-Purovskoye gas and con-
densate field in the Yamal-Nenets area
has 45.5 Bcm of gas reserves and approxi-
mately 6.8 million ton of recoverable
condensate reserves.
Singapore• KEPPEL INKS GOFLNG CONVERSION
Keppel Shipyard has signed its third con-
tract with Golar Gandria worth approxi-
mately US$684 million for conversion
works.This will see Keppel Shipyard convert
Golar’s Moss type liquefied natural gas
(LNG) carrier, the Gandria, into a Golar
Floating LNG (GoFLNG) facility.
GoFLNG Gandria will be delivered
approximately 31 months after Keppel
Shipyard receives a notice to proceed,
which is expected to be in 2016.
UK-based Golar LNG CEO, Gary Smith
says Keppel has previously performed
the conversions of three LNG carr iers to
floating storage and regasification units
for the firm. “We are now on track to re-peat that success in our floating liquefac-
tion efforts as well.”
• VIKING WINS LAND RIG CHARTER
SGX-listed Viking Offshore and Marine
has secured a 48-month charter for a sec-
ond land drilling rig system for approxi-
mately US$31 million.
Viking’s subsidiary Viking LR2 Pte
Ltd., will charter the 1500 bhp train type
land rig and related drilling equipment
system to a Chinese land rig specialist.
It will be immediately deployed on a
North Af rican oil field concession jointly
owned by a South Asian energy operator
and the local energy authority.
Viking had acquired from and leased
back its first land rig in September 2014
to the same charterer, which used it to
uncover natural gas.
After positive assessment of hydrocarbon
potential in the locality, the second rig was
chartered to accelerate drilling activities.“The second charter enhances our
portfolio of earnings-accretive assets in a
market environment of low oil prices. We
intend to capitalize on our track record
to build up our charter fleet to enhance
shareholder value,” executive director
Daniel Lin says.
Thailand• MUBADALA IN NONG YAO PAYDAY
Mubadala Petroleum commenced oil pro-
duction from the Nong Yao field offshore
Thailand.Nong Yao is located in the G11/48 license
in the southern Gulf of Thailand, about
165km off Thailand in 75m water depth.
Production at Nong Yao is expected
to reach a peak rate of approximately
10,000 b/d, as more production wells are
completed.
Proved and probable reserves con-
tained in Nong Yao’s primary reservoirs,
and recoverable by water injection are es-
timated to be in the order of 12.4 MMbbl.
The facilities comprise a wellhead-pro-
cessing platform (WPP) and a minimumfacility wellhead platform (WHP), with
crude export via a floating storage and
offloading (FSO) vessel. The facilities
have production capacity of up to 15,000
b/d of oil and 30,000 b/d of fluids.
Vietnam• MURPHY EYES VIETNAM
PetroVietnam and Murphy Oil signed an
agreement to jointly develop oil and gas
projects in Vietnam and the US.
Senior officials from both enterprises got
together at the US Chamber of Commerceto discuss potential opportunities.
Murphy – which is involved in
field operations in Southeast Asia,
Australia, the Gulf of Mexico and the
Mediterranean – is now looking to tap
into Vietnamese reserves.
The international oil major is particu-
larly keen to participate in the develop-
ment of Block B gas project in the Malay
Tho Chu basin and some blocks in the
Cuu Long basin south of Vietnam, while
PetroVietnam has interest in Murphy’s
Gulf of Mexico projects.
•
• NIDO SHOWS GALOC
RESOURCE ESTIMATES
Nido Petroleum has released the results
of an independent contingent resources
assessment of the mid-Galoc area of the
Galoc oil field in the northwest Palawan
basin, of fshore Philippines.
Independent assessment by Gaffney
Cline and Associates (GCA) estimates
area to contain 1C contingent resourcesat 6.2 MMstb on a gross basis.
The 2C and 3C gross contingent re-
source estimates a re 9.5 MMstb and 14.6
MMstb, respectively.
For Nido, independent contingent
resources estimation is a key milestone
in the plan to develop the mid-Galoc area
of the field. The firm has 55.88% working
interest in the Galoc oil field.
Russia• ROSNEFT, STATOIL DRILL
NORTH KOMSOMOLSKOYE FIELDRosneft and Statoil completed drilling
works, as part of the pilot project at the
PK1 layer of the North-Komsomolskoye
field onshore Russia.
The North-Komsomolskoye oil and
gas condensate field is located in the
Purovsky and Nadymsky regions of the
Yamalo-Nenets Autonomous District.
It has complex geology associated with
an oil rim of highly viscous oil, as well
as an extensive gas cap. Rosneft and
Statoil implemented extended logging,
including core and fluid samplings.Also, for the first time onshore in
Papa New Guinea• HERITAGE FINDS
NO GAS AT KWILA-1
Kwila-1 exploration well in PPL 337 in
Papua New Guinea (PNG) was drilled at
a depth of 3281ft and wireline logs have
been run, according to joint venture part-
ner Kina Petroleum Ltd (KPL).
A number of porous, deepwater sand-
stones were intersected but no moveable
gas was observed. There were no zones
that warranted testing within the drilled
section of the well.
However, slightly higher gas satura-
tions were noted within the deeper sands
and may be the cause of the anomaly
recognized on seismic data and previously
thought to be a hydrocarbon effect.
Kina’s managing director, Richard Schro-
der says, “Kwila-1 and Raintree-1 were the
first wells drilled in North Guinea for over
22 years. Both wells drilled independent ob-
jectives and have advanced our knowledge
of the petroleum play in this basin.”Content is copyright protected and provided for personal use only - not for reproduction or retransmission.
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By Audrey Raj
Filipino oil and gas workers are still very much in de-mand among international oil majors, despite the marketdownturn.According to recruitment specialist, Orion Group, the de-
mand for skilled Filipinos has increased over the years, and
now they can be found in almost every country, including
Russia and the Middle East.Although Philippines is another fast growing economy in
Asia, Orion says unemployment among the locals still remains
high, due to a shortage of domestic work opportunities.
To find out more, AOG interviewed the founder of Filipino
International Professionals (FIP), Victor Cabiles, and Rowena
Espiritu-Gaspar, Air Energi’s country manager for Singapore
and contract recruitment manager for Asia Pacific.
Currently residing in Pennsylvania, Cabiles is originally
from the Philippines. He is also director of international
relations at the Southpointe Marcellus Shale Chamber of
Commerce.
Having been with Air Energi for 14 years, Espiritu-
Gaspar leads the contract recruitment team in the AsiaPacific region, plus is responsible for ensuring growth
and profitability in Singapore.
What’s your view on the demand
for oil and gas Filipino workers overseas?
Espiritu-Gaspar: Over the last decade, there has been a
strong and steady demand for experienced technical engi-
neers and other specialists from the Philippines.
Whether companies explicitly specify a preference for
Filipino workers, the fact remains that a vast majority of oil
and gas projects in the Middle East and Asia are manned by
Filipinos.
We don’t see this demand diminishing in the near future,despite the market downturn. In fact, we expect it to grow as a
number of upstream and petrochemical projects move into the
commissioning and construct ion phases.
Cabiles: Here in the Southpointe Industrial Park in
Southwestern Pennsylvania, where I work, at least four major
oil and gas players have established a strong presence – Range
Resources, Consol Energy, Noble Energy, and Rice Energy.
To me, this signals a significant and long-term commitment
of these companies to grow their businesses, which means they
will continue to need skilled oil and gas workers.
However, as the US economy is still in the recovery phase, and
many US citizens are available to meet the needs of the oil and
Mature markets in the
Middle East and Asia
continue to have a steady
demand for Filipino oil andgas professionals.
Filipinos stillin demand abroad
AOG | July · August 201510 I m a g
e f r o m i
S t o c k .
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gas companies here, the demand for
overseas Filipino workers (OFWs)
may not come from the US.
Given the high interest shown
by other countr ies, the need for
Filipino oil and gas engineers may
come from countries, such as China
and Brazil, for example.
Why are OFWs in demand?Espiritu-Gaspar: Most Filipinos
are able to speak, read and write in
English at a working proficiency,
and are regarded as highly adapt-
able and resilient people.
During my experience at Air
Energi, the Filipinos I have worked with have shown great abil-
ity to integrate and work well with colleagues and managers,
and are considered to be good team players.
A large number of Filipinos are also family-oriented people
and their main priority is bettering the lives of their family.
Therefore, they are known to have a st rong work ethic and to be
flexible in adapting to various locations, including offshore.
Cabiles: Filipino workers are in demand in most sectors all
over the world. It is because of their skills and professionalism
that they have demonstrated over the years.
Therefore, if other countries would need oil and gas techni-
cal workers, they would consider, if not prioritize recruiting
Filipinos. Also, Filipino workers are very cost competitive,
making them more in demand.
Why is there a lack of job opportunities
within the Filipino energy sector?
Espiritu-Gaspar: The oil and gas sector in the Philippines is
not yet fully developed. Although new hydrocarbon reserveshave recently been discovered in the country, and a number of
companies have recently awarded contracts to local firms, the
industry is still emerging.
Because the Philippines is not
as mature as its Southeast Asian
neighbors, such as Indonesia
and Malaysia, better opportuni-
ties often exist elsewhere. And
although there is some demand
for engineers locally, experienced
Filipinos frequently choose to
work overseas due to higher earning
potential.In the Philippines, it is relatively
easy to hit the maximum tax rate
of 32%, whereas opportunities in other countries offer tax-free
packages or lesser tax regimes.
Cabiles: It may be that foreign firms have not yet considered
the Philippines as a substantial source for unconventional gas
or shale energy; hence, they have not yet aggressively estab-
lished a presence or operations there.
Which countries will look to employ Filipino
oil and gas professionals?
Espiritu-Gaspar: Mature markets in the Middle East, such
as Abu Dhabi, Qatar and Saudi Arabia and those in Asia,
such as Malaysia, Singapore and
South Korea will continue to
have a steady demand for Filipino
professionals.
We’ve also seen recent growth
in the deployment of Filipinos to
Africa and the Caspian region.
Even in regions where a local
workforce is in high demand,
there is still a requirement fortechnical workers from the
Philippines.
Cabiles: The US may not be one
of these countries, at least not for
the time being. Countries in the
Southeast Asian region closer
to the Philippines, like Malaysia and Indonesia, are the most
likely to need Filipino oil and gas professionals in the immedi-
ate future.
What kind of skills are in demand?
Espiritu-Gaspar: In terms of skill sets, many Filipino work-
ers fill design and engineering positions, andwork in piping, structural, electrical,
instrument and mechanical roles.
Additionally, Filipinos are often
sought to work in the project
services and controls divisions,
occupying planning, quantity
surveying, cost control and
procurement positions. We also
see a high demand for workers to
fill quality assurance inspection,
field construction and maintenance
positions.
Cabiles: Project management professionals, well opera-
tion engineers, and technicians, just to name a few. This is
especially true if they have experience in the unconventional
gas sector, since this is the booming industry, at least here in
the US.
There is a LinkedIn group called ‘Filipinos in Oil and Gas,’
which provides more insights. For example, glancing at the
group’s page, there is a post from Jason Brindisi, director at
WiseRecruit, mentioning that Kampac Oil from Dubai is plan-
ning to increase its investment in the Philippines.
Are OFWs in demand for
offshore or onshore work?
Espiritu-Gaspar: They are in high demand for both offshore
and onshore projects. In fact, if it wasn’t for some of the chal-
lenges associated with applying for work visas in certa in loca-
tions, I am confident that more Filipinos would be mobilized to
overseas locations.
Cabiles: I would have to say both offshore and onshore.
However, referencing again to a post by Brindisi, it seems like
offshore work is more common than onshore.
The oil and gas industry is very vertical, consisting of a
number of processes, such as the upstream, midstream, and
downstream sectors, and all of which are likely to require dif-
ferent labor force skill sets. AOG
Rowena Espiritu-Gaspar
Victor Cabiles
“Filipinos will most likely weigh
up the option of staying in
the Philippines where jobs
are lower paying, or working
overseas where there is higherearning potential.”
Rowena Espiritu-Gaspar
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from 13 3/8-36in. It also retrieves subsea wells with 18 3/4in
high-pressure housing all in one trip and without using explo-
sive cutting devices. The M.O.S.T. system has a maximum pullcapacity of 181,437kg and a maximum lift capacity of 90,718kg.
Deployment
The M.O.S.T. system is deployed on drill pipe from a semi-
submersible rig and is simply lowered into position as part of
the BHA. Moving the mandrel body upward mechanically acti-
vates three grapple arms that close and latch onto the external
profile of the wellhead high-pressure housing.
The arms can be customized to match a range of wellhead
models from different manufacturers, even wellheads that
deviate from the standard 18 3/4in design. The mandrel then
rotates into the locked position inside the grapple housing. The
latch and unlatch of the arms and the rotation of the mandrel body can be confirmed visually using a remotely operated ve-
hicle (ROV) on the seabed.
Once latched onto the wellhead housing, the M.O.S.T. system
prevents the wellhead from turning or tilting, which enhances
stability throughout cutting and retrieval operations.
Unlike an internal latch mechanism, which risks damaging the
critical internal seals within the high pressure housing and ren-
dering the wellhead unusable for future operations, the grapple
arms on the M.O.S.T. system never contacts the internal seals.
This eliminates intervention that would ordinarily be re-
quired to recycle the wellhead if it can be salvaged at all.
Additionally, the external latch provides the necessary well-
head support to eliminate lateral whipping that can damageequipment and impede cutting.
Another advantage of latching the M.O.S.T. system onto the
external profile of the wellhead high pressure housing is the
larger ID flow area. The design of the M.O.S.T. system provides
greater clearance that enables cuttings from the inner and outer
casing strings to flow out of the ports and away from the working
mechanism, which prevents swarf buildup.
Cutting options
The M.O.S.T. system offers three cutting modes, such as com-
pression cut with a mud motor; tension cut with a mud motor;
and compression cut with a marine swivel (top drive rotary).
Suited for deepwater and high currents, the compression cut
I
ncreasing energy demand has expanded exploration and pro-
duction activities to nearly every corner of the world, regard-
less of environmental complexitiesIn response, operators have invested substantially in deepwa-
ter field developments, and today, a large number of deepwater
wells are recovering hydrocarbons f rom greater depths.
However, over time as these reservoirs reach their economic
limit, infrastructures in operation will eventually become idle
and cost significantly for daily maintenance.
When deepwater wells shift from asset to liability, plugging
and abandonment (P&A) is the next step. P&A is a major ex-
pense without return on investment and it can cost mill ions of
dollars per well. Besides the risk of damaging well components
that could be reused, P&A operations also inherent safety and
environmental risks. To mitigate the expected high costs and
potential hazards, dismantling deepwater wells require expe-rienced personnel, highly advanced technology and carefully
planned execution.
Challenges
When constructing deepwater wells, operators have pushed the
boundaries to tap into deeper reservoirs and drill more high-
pressure, hight-temperature (HPHT) wells.
To accommodate these environments, operators are increas-
ingly running thicker, heavier casing, typically 22in x 36in,
while the industry standard 18 3/4in wellhead inner diameter
(ID) has remained the same. This results in challenges when
cutting casing and retr ieving subsea wellheads during P&A.
The restrictions on the wellhead ID prevent using tools withlarge outer diameters (OD) in the cutting bottom hole assembly
(BHA), which reduces cutting stabilization. With no centralizer
on the inner casing string, the cutt ing BHA and inner casing
can bounce vigorously, as the outer casing st ring is cut.
M.O.S.T.
Weatherford has developed a technology that improves P&A
efficiency, reduces risks, and overcomes the challenges associ-
ated with cutting thicker, heavier casing strings and retrieving
subsea wellheads.
With no depth, pressure or temperature restrictions, the
Mechanical Outside-Latch Single Trip (M.O.S.T.) system cuts
and recovers multiple cemented and uncemented casing st rings
Weatherford’s Cham Soon Hoe and Aung
Din explain how operators in Vietnam and
Australia have benefited from the Mechanical
Outside-Latch Single Trip (M.O.S.T.) system
during subsea well abandonments.
Making the most
of M.O.S.T.
M.O.S.T. system Photos from Weatherford.
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and tension cut modes use a down hole mud motor to rotate theknives, as the inner and outer casing strings are cut.
By eliminating the need to rotate the cutting BHA from the rig
the M.O.S.T. system can operate at greater depths and in stron-
ger currents. Suited for shallower waters and lower currents,
the compression cut top drive rotary mode incorporates an
additional tool. The marine swivel, which lands on top of the
M.O.S.T. system assembly, rotates the drill string and cutter
simultaneously to cut the casing strings.
By eliminating the need for explosive cutting devices and
environmental hazards from multiple detonations, the M.O.S.T.
system improves safety and efficiency. Shaped charges may not
completely sever casing on the first attempt and may require a
second blast.By contrast the M.O.S.T. system achieves complete separa-
tion by simply pulling up on the tool once the cut is made. The
entire assembly can then be pulled through the moonpool and
placed on the rig floor.
Vietnam case study
Another problem that operators encounter during the abandon-
ment of deepwater wells is side loading on the cutting str ing.
An operator in Vietnam used the tension cut M.O.S.T. system to
cut and pull cemented 22in x 36in casing strings in 292m of water.
Strong currents made it impossible to maintain a semisub-
mersible rig directly above the wellhead. The off center rig place-
ment pushed the cutting string extending from the rig to thewellhead to one side, which generated lateral force on the st ring.
A major advantage of using the mud motor for this applica-
tion is that it minimizes the effects of side loading. By placing
the portion of the cutting str ing that is exposed to the open sea
above the motor, the string remains stationary at all times.
The M.O.S.T. system eliminates the requirement to rotate the
entire string as casing is cut and improves cutting performance
in these harsh conditions. The entire operation, which usually
averages between 8-12 hours, took only five hours.
By reducing the amount of rig time by at least three hours,
the minimum cost saving for the operator was US$120,000.
Additionally, the cutting BHA had minimal damage and the well-
head could be reused without incurring significant repair costs.
Australia case study
An operator in Australia deployed the tension cut M.O.S.T.
system to cut and pull uncemented 20in x 30in casing strings
in 291m of water. Without the support of cement and a cen-
tralizer on the inner casing string, the operator anticipated
severe vibration once cutting began, which could damage the
knives and require extra trips down hole to cut and pull the
outer casing string. Cutting the inner and outer casing strings
began at a depth of 958ft (292m). These parameters included a
flow rate of 1741 L/min and the application of 1650 psi.
To minimize vibration of the inner casing string, pressure
was monitored and controlled. Once the maximum pressure
was obtained, the flow rate of water pumping through the BHA
string was maintained to keep the pressure constant. Both the casing str ings and wellhead were removed in a
single trip with minimal damage to the 39in sweep knives. The
operator avoided nonproductive time (NPT) by eliminating the
need for a second trip. By using the M.O.S.T. tool transporta-
tion skid, it enabled the equipment to be delivered to the well
site preassembled and ready to deployed. The M.O.S.T. system
saved two hours of rig makeup and lay down time valued at
approximately $65,000. No safety or environmental incidents
were recorded and the entire operation took 8.5 hours. AOG
Aung Din is a region sales manager for
fishing and well abandonment services at
Weatherford. He holds a mechanicalengineering degree from the National
University of Singapore and has spent over
10 years working in the oil and gas sector.
Cham Soon Hoe is Weatherford’s regional
operations manager for fishing and re-entry
services with over 10 years experience in
running fishing tools and well abandonment
projects. He holds a degree in petroleum
engineering from the University Technology
of Malaysia.
Weatherford P&A operations in Vietnam. Cutting and pulling uncemented 20in x
30in casing strings.
Wellhead retrieval with M.O.S.T. tool.
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CNOOC’s LNG-powered tugboat. Photo from Rolls Royce.
“Qatar’s LNG accounts for 80% of all LNG exports to Asia.
Japan, South Korea, India and China a re the main importers of
Qatar’s LNG. Japan is Qatar’s largest market followed by South
Korea and India,” Salameh explains.
At present there is a combined 52 Bcm/a of Qatari LNG con-
tracts in place with Asian buyers, which is close to 50% of over-
all Qatari production, points out Nayem Chowdhury, analyst at
Bentek Energy, an analytics and forecasting unit of Platts.
“Largest share accounting to 35 Bcm/a is held with India, Japan and South Korea, with each of these nations cont ract ing
11-12 Bcm/a of LNG from Qatar,” Chowdhury says.
“However, this number drops by 10 Bcm/a in 2022, as 10
Qatari contracts with Japanese buyers come to an end the
preceding year 2021, and a further 7 Bcm/a contract with South
Korea also comes to an end by 2023.”
US, Australia impact
While Salameh is determined that Qatar will continue to be
one of the world’s largest producers and exporters of LNG well
into the future, he also thinks Austra lia could overtake them to
become the largest LNG exporter by 2020.
LNG exports from the US and Australia could seriouslycompete with Qatar LNG exports to Asian countries, Salameh
says.
“Australia is the biggest rival in the Asian market and will
likely continue to be so,” he says. “In 2014, Qatar exported 77.4
million ton of LNG, while Australia exported 20.8 million ton.
“Against Qatar’s 77 million ton of production capacity,
Australia will have 85 million ton by the end of this decade.
And by the mid 2020s, the US may have built a production
capacity of 50 million tonne or more, and Canada would have
added another 35-50 million tonne,” he says.
The commencement of US exports will also add length to the
market and downward pressure on European hubs, as well as
Asian LNG spot prices.Chowdhury says as nearly 25% of Qatari volume is not con-
tracted as of 2015, this will impact the price they can achieve
for their cargoes. “However, we expect Qatari production to
remain robust, as their cost of production remains very low.”
While Qatar’s main advantage is its geographical loca-
tion between main markets in Asia and Europe,
its disadvantage is its long distance
from East Asian buyers rela-
tive to Australia.
“Nonetheless, Australia is
a much higher cost producer
than Qatar and doesn’t act
strategically, since its LNG
Although Qatar is the largest exporter of liquefiednatural gas (LNG), accounting for 32% of global LNG
exports, its dominance could be challenged by the US,
Australia and Iran.
Accounting for 55% of the country’s gross domestic product
(GDP), Qatar’s economy heavily relies on its energy sector with
most of its revenue generated from selling LNG.
Its state-owned enterprise Qatar Petroleum (QP) and its sub-
sidiaries run much of Qatar’s oil and gas industry. QP has 14
LNG trains with a total production capacity of 77 MTPA, and
RasGas and Qatargas operate seven LNG trains each.
The Qatargas consortium includes QP, Total, ExxonMobil,
Mitsui, Marubeni, ConocoPhillips and Shell, while QP and
ExxonMobil own RasGas.Qatar has the third largest natural gas reserves in the world
amounting to 24.5 Tcm and the lowest production costs of LNG
in the globe, says Dr. Mamdouh Salameh,
an international oil economist and con-
sultant to the World Bank.
With more competitors entering
the global gas market, Qatar’s LNG
exports to Asia could be further
tested. Audrey Raj reports.
Qatar LNGchallenged
Laffan Refinery.
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industry is split between many different companies,” Salameh
adds.
“Qatari LNG will continue to be very profitable, but prices
will decline and it won’t be able to be the swing producer or
strategic player anymore.”
Plunging global oil prices, Salameh says, may turn hopes for
cheap LNG supplies from the US into a costly disappointment
for Asian buyers who have already invested billions of dollars
in long-term contracts.“The 54% price slide since June 2014 to US$60/bbl exposes
cracks in the assumption by Japan, India and other Asian buy-
ers that cheap US LNG would muscle into high value Asian
energy markets from 2016,” he says.
“The oil price drop has also raised the possibility that some
US Gulf Coast LNG export plants may be mothballed before
they ever get a chance to supply world markets.”
Iran nuclear deal
Iran’s final nuclear deal would mean internat ional oil and
gas majors can now invest in Iranian exploration, plus import
technologies needed to develop the country’s vast amount of
hydrocarbon reserves.However, given current market conditions only limited inter-
national investments will likely be available to help increase
Iran’s production.
“At today’s low oil and gas prices, investors are cutting back
everywhere. The terms offered by Iran must be so remunerative,
so as to entice foreign investors back into Iran,” Salameh says.
“However, with technology and investments Iran could sub-
stantially raise its natural gas production, and export sizeable
amounts to Europe and the Asia-Pacific region in the form of
natural gas and LNG, competing directly with Russian gas sup-
plies to Europe and Qatar’s LNG exports to Asia.”
Asian buyers
The Global Liquefied Natural Gas (LNG) Market Assessment by
Frost and Sullivan found that demand from emerging Asian
countries fuels global LNG imports.
According to the report, the market had a supply of 32.42
Bcf/d in 2014 and estimates this to reach 69.26 Bcf/d in 2025,
with LNG demand from Asia projected to be 23 Bcf/d by 2025.
Asian LNG demand is expected to grow at a rate of 5% per
annum from 2014-2025, and Chowdhury says this will be par-
ticularly driven by China and India.
“We expect their combined imports to double reaching just
above 90 Bcm/a between 2014-2020. India could receive up to 8
Bcm/a of US LNG starting mid 2017.
“We also expect a six-fold increase in LNG demand at the
newer importing nations like Indonesia, Malaysia, Pakistan,
Singapore and Thailand in the next ten years,” Chowdhury says.
While demand is likely to rise further supported by lower
prices, Qatar’s ability to maintain its pricing advantage will
be challenged, as these markets benefit from new supplies and
better deals.
“Contract terms for LNG buyers are changing too,” Salameh
says. “Until recently, LNG was mostly supplied under rigid
conditions set out by major gas companies, and buyers wouldtypically have to commit to 20-year contracts.
“As market dynamics have changed in buyers’ favor, they are
opting for shorter term contracts and pricing arrangements are
becoming more flexible as well,” he says.
“Today, buyers have a choice. They can buy LNG at an oil-linked
price, Henry Hub-linked price or European gas-based price.
“Buyers in China, Japan and South Korea are already using the
prospect of LNG shipments from the US, as leverage in seeking
lower prices and better terms from sellers, such as Russia.
“The Chinese are likely to be looking to squeeze even better
price out of the Russians,” Salameh says.
Qatar’s responseThe Qatari government has suspended construction of new LNG
plants, as well as put a moratorium on further development of
the North field, restricting annual production to 77 MTPA.
“That creates an opening for competing nations. Qatar could
add another 12 MTPA of capacity by debottlenecking its existing
plants, and the North field has ample reserves,” Salameh says.
“However, Qatar seems in no hurry to launch new projects.
Its response has been buying up the competition.
“For example, Qatar Petroleum International (QPI) bought
stakes in gas and oil fields in Brazil, Canada and the Republic
of Congo since April 2013,” he adds.
“QPI also owns 70% stake in Houston-based Golden Pass
Products, a joint venture with ExxonMobil that operates theLNG import terminal in Sabine Pass in Texas.
“It is also seeking final permission from the US Energy
Department to add an export terminal to the existing import
terminal,” he says.
In addition, the foreign investment arm of the sovereign wealth
fund, has also taken stakes in Royal Dutch Shell and France’s
Total, both of which operate LNG plants around the world.
Salameh says, “Qatar’s LNG exports will continue to be enor-
mously lucrative with the lowest production costs in the world
and enormous volumes of petroleum.
“But if it is not going to expand capacity further, it does not
have the strategic ability to deter competitors. There is a lot of
new competition coming up.” AOG
Halul offshore platform. Qatargas LNG ship. Photos from Qatargas.
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“Our stepped up presence in large liftboats demonstrates
increasing market acceptance and growing demand for these
type of vessels,” Chan says.
Fabricating the 450ft-long lattice legs is a major engineering
feat for TRIYARDS, as they need to be sturdy enough to with-
stand powerful winds and ocean currents to ensure the safety
of 250 crewmembers onboard.
The vessel’s hull is fabricated in sections and interfaced with
key pieces of equipment, including the thruster, jacking sys-
tem, generator, HVAC system and electrical system.
“Apart from the usual fabrication work, we also have to meticu-
lously select the appropriate steel to design and develop suitable
legs for the BH 450,” says yard general manager, Jeffery Ong.
Offshore vessel fabrication and engineering solutionsprovider TRIYARDS achieved yet another milestonewith the delivery of its second BH 450 liftboat. TheABS-classed BH 450 is the group’s first fabricated lattice leg lif t-
boat standing at more than 450ft, capable of operat ing in water
depths up to 105m.
Designed by Lousiana-based A.K. Suda Ltd., BH 450 is athree-legged, self-elevating, self-propelled general service
workboat suitable for operations in the North Sea.
The company’s CEO Chan Eng Yew says these liftboats
account for more than 70% of the group’s revenue with each
worth approximately US$90 million.
“The BH 450 showcases TRIYARDS’ superior design, en-
gineering, fabrication and project management capabilities,
because it is one of the world’s tallest lif tboats,” Chan says.
“We delivered our first BH 450 mid last year and the second
unit was delivered this year to Southeast Asia-based operators.
“Since then, we have also bagged orders worth $175 million
to construct our third and fourth BH 450 units, currently under
construction in our Vietnam yards.
Ho Chi Minh City yard.
Singapore-headquartered TRIYARDS
continues to expand its fabrication
expertise. Audrey Raj explains.
Fabricationscales new heights
Liftboat hull fabrication.Photos from TRIYARDS.
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“As a result, extreme precision is needed to construct the
latticed legs. For example, heat distortion has to be minimizedduring fabrication and welding.
“We also use laser equipment to measure the dimensions and
tolerance levels of the legs at every step of the construct ion pro-
cess. Even the jacking system has to be ca refully tested using a
full load that is lifted 105m high,” Ong explains.
Fabrication expertise
In addition to liftboats, TRIYARDS also fabricates floating
production, storage and offloading (FPSO) vessels, platform
jackets, catenary anchor leg mooring (CALM) buoys, heavy-
duty offshore crane structures and large A-frames.
End users who have deployed the firm’s units include inter-
national oil majors, such as PETRONAS, Chevron Thailand,Brunei Shell Petroleum, ExxonMobil Nigeria and Pertamina.
Most recently, in March, the group secured a fabrication
project from London Marine Consultants (LMC) to supply an
external turret mooring system for the FPSO vessel destined for
the Petrobras-operated Libra field offshore Brazil.
LMC will carry out the engineering, procurement and
construction of the external cantilever turret, which will be
fabricated at the TRIYARDS shipyards.
After which, the turret will be integrated with the Navion
Norvegia FPSO at Jurong Shipyard where the Navion Norvegia
shuttle tanker is being converted to form the Libra extended
well test FPSO for OOGTK Libra GmbH & Co KG.
TRIYARDS has also completed other turret fabrication jobsfor FPSOs, such as Perisai Kamelia and LMC FSO Salamander
in the past, Chan says. “Our works for these vessels have been
audited by oil majors like Hess and Total.”
Since the group’s acquisition of aluminium shipbuilders,
Strategic Marine (S) and Strategic Marine (V), TRIYARDS has
added both new fabrication capacity, as well as engineering
capabilities in aluminium too.
“Strategic Marine has built fast military craft and other com-
mercial vessels, plus aluminium helidecks and gangways for
the marine industry,” Chan says. “With them under our belts, we
not only have an extended client base, but have also become one of
the few yards in Asia with capabilities in both steel and alumini-
um shipbuilding and fabrication.”
Vietnam yards
Focused on shipbuilding, ship conversion, medium-to-heavyfabrication and ship repair, TRIYARDS owns fabrication yards
in Ho Chi Minh City and Vung Tau in Vietnam, as well as de-
sign and engineering facilities in Houston and Singapore.
The three main yards for heavy fabrication work, Ong says,
are fully equipped to handle a wide range of design and engi-
neering projects, vessel conversions and ship repairs.
Furnished with heavy-lift gantry cranes and deepwater
berths, these Vietnamese shipyards can undertake large scale
projects to fabricate dif ferent components of fixed platforms, as
well as vessel constructions.
The facility located in Ho Chi Minh City boasts 100,000sq m
in size with 50,000sq m of covered fabrication space; while the
two yards in Vung Tau are collectively 350,000 sq m big withapproximately 120,000sq m workshop space.
Its design and engineering facility in Houston produces
equipment, such as cranes, A-frames and winches, which are
installed on the self-elevating units and offshore support and
construction vessels fabricated at the yards.
The close proximity of the two yards in Vung Tau, such as
the TRIYARDS Vung Tau and Strategic Marine Vung Tau, Chan
says, has enhanced the team’s operational efficiency.
“For meeting international standards in quality assur-
ance, occupational health and safety and business continuity
management, our facilities won cert ifications, such as ISO
22301:2012,” he highlights.
“These credentials have strengthened our competitive edge, boosting our efforts to establish TRIYARDS as a fabricator for
the global offshore and marine industries.
“Our offshore expertise also extends to construction vessels, as
well as other offshore support watercraft, including anchor han-
dling tug supply vessels and platform supply vessels,” Ong adds.
“One to note is the construction of Lewek Constellation
for EMAS AMC. We delivered the vessel on time and within
budget from our Vietnam yards, which represented another
milestone for TRIYARDS.”
Lewek Constellation is a multi-lay offshore construction ves-
sel with ultra deepwater pipelay and heavy lift capabilities. It is
equipped with an ice-classed hull capable of transiting through
0.8m of ice and a technologically advanced DP3 system. AOG
BH 450 liftboat.
Vietnam yard workers.
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“We were awarded the Zawtika EPCIC project in May last
year,” Chen says. “It has been a significant milestone for us, as
we get to work closely with Southeast Asian oil companies.
“It has helped us with our overall improvement as an EPCIcontractor, plus provided the opportunity to further expand
into international markets outside of China,” Chen adds.
Scheduled for completion in April 2016, Zawtika EPCIC
involves two stages – onshore construction and offshore installa-
tion. Since it’s the group’s first EPCIC work in international wa-
ters, Chen says they experienced some first-of-its-kind challenges.
Zawtika EPCIC
International procurement and scheduling were some of the dif-
ficulties faced during the initial stages of onshore construction.
In order to procure materials and equipment required for the
job, COOEC had to collaborate with international manufactur-
ers from the company’s approved vendor list (AVL).“This was a challenge for us,” Chen says. “Since we haven’t had
prior relationship with these overseas manufacturers, it was a
E
xecution of the Zawtika phase 1B engineering, procure-
ment, construction, installation and commissioning
(EPCIC) project is well underway, says Offshore Oil
Engineering Co. (COOEC).Headquartered in Tianjin, China, COOEC is a Shanghai Stock
Exchange-listed, wholly-owned subsidiary of Chinese oil major,
China National Offshore Oil Corp. (CNOOC).
The Zawtika EPCIC includes four wellhead platforms, three
20 and one 12-well slots, four associated pipelines, brown field
modification of existing platform and telecommunications inte-
gration in the Zawtika field.
Awarded by Thai operator PTT Exploration and Production
(PTTEP), Zawtika development is located in blocks M9 and M11
in the Gulf of Martaban, offshore Myanmar.
According to project control manager, Liu Chen, Zawtika
phase 1B is the first international EPCIC project for the
group and this has helped to strengthen their position in theSoutheast Asian market.
Audrey Raj speaks with COOEC about
the group’s fi rst international EPCIC
project challenges and more.
COOEC goes
international
Tanggu fabrication yard Photos from COOEC
Lanjing vessel
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challenge for us to control cost and timely delivery of the products.
“As a result, to run the project smoothly, COOEC formed a
11-person Zawtika project procurement team to focus simply
on international purchasing.“Moreover, to ensure the quality of the procured materials
and keep track of deliveries, we also hired several experienced
international purchasing exper ts to work alongside these
manufacturers for acceptance check,” Chen continues.
While the detailed engineering star ted in July 2014, the on-
shore construct ion kicked off December 2014.
Due to this tight schedule and strict engineering require-
ments, COOEC had to transfer another 150 personnel from its
technical department to work with the project management
and procurement teams.
“More man power allowed for a even smoother work flow and
on schedule onshore construction, which is at its final stages,
preparing for offshore installation in October,” Chen says.“Here, too, we will experience challenges due to adverse
weather conditions and tight scheduling. Myanmar is a
typhoon-prone sea area and offshore construction is not al-
lowed during this time.
“So, we have to complete the job in less than five months or
else it will result in a delay. To overcome this challenge, we
have planned to use all our leading vessels for the installation
phase, including Lanjing and HYSY 289 ,” Chen says.
FPSO, Kenli 10-1 EPC
In May, COOEC won an engineering, procurement and con-
struction (EPC) contract for two 300,000 dwt FPSO vessels, by
TUPI BV, owned by Petrobras.“This project was originally contracted to Integra. Due
to some problems, we were asked to take over the job,” says
deputy manager of project management, Zhai Chao.
“Integra completed the engineering work for one FPSO and the
second one still requires some work. We will complete that engi-
neering bit and start on procurement and constructions stages.
“Scheduled for completion in December 2017, this is our first
international FPSO EPC contract with Petrobras. We believe this
will open up expansion into the South American market as well.”
On the local front, COOEC recently completed the EPC for
CNOOC’s Kenli 10-1 oil field involving three platforms, four
subsea pipelines and two submarine cables.
Located in the South of Bohai, in approximately 17m water
depth, the main production facilities of this oilfield include
one central processing platform, two wellhead platforms and
70 producing wells.
Though there are currently 12 wells producing approxi-mately 10,750 bo/d, operator CNOOC expects this to peak at
36,000 b/d in 2016.
COOEC
Employing over 8000 personnel, COOEC operates three yards
that collectively cover a total area of 3.5 million sq m, located
in Tanggu of Tianjin Municipality, Qingdao of Shandong
Province and Zhuhai of Guangdong Province.
“Our large scale shallow and deepwater engineering projects
are executed in these yards. We also own a diversified offshore
construction fleet consisting of over 20 vessels,” Chao says.
Notable ones include the 3000m deepwater pipelay and
hoisting vessel HYSY 201, the vessel Blue Whale with hoistingcapacity of 7500 ton and the semisubmersible self-propelled
engineering ship HYSY 278 .
In July, HYSY 278 completed module floatover installation
for the CKX project at the Cakerawala gas field in the Gulf of
Thailand, approximately 150km northeast to Kota Bharu in
Malaysia.
A joint operation by COOEC and Dockwise Shipping, it was
HYSY 278 ’s second floatover installation, following the Enping
25 module in 2014.
“Other type of vessels we own consist of a 50,000 ton semi-
submersible self-propelled vessel, a 3000m deepwater multi
function underwater engineering vessel, a deepwater installa-
tion vessel and deepwater trenching vessel,” Chao says.After being in operation for more than four decades, Chao says,
the firm now specializes in eight essential offshore services.
These comprise of engineering design, engineering construction,
engineering installation, field maintenance, underwater engineer-
ing inspection and installation, skid mounted product manufac-
turing, offshore engineering inspection and EPC management.
“We also have an extended client base, and have previously
done projects for other international companies like Husky
Energy, Confield, Kerr-McGee, Technip, MODEC Offshore, Aker
Solutions and FLUOR,” Chao says.
“Moving forward, we hope to further expand our services in
Asia Pacific, as well as Afr ica, Canada, Europe and possibly the
Artic region.” AOG
Zawtika project. Zawtika project team.
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year and at the end of 2014 its GDP surpassed that of the US.
With a population of almost 1.4 billion people, China has be-
come the second largest economy.
According to the United Nations Environment Programme,
the use of fossil fuels by China’s rapidly growing population
has increased by more than sevenfold, growing annually at a
rate of 5.3%.
With the rapid growth rate in China’s economy, population,and consumption of energy resources, China is shift ing its fo-
cus to develop a National IPR Strategy Action Plan (IPR Action
Plan) to enhance its’ capacity to leverage its IPR in global
competition.
IPR, 2020 action plan
With the advancement of domestic technology and the imple-
mentation of the IPR Action Plan, Chinese enterprises are
developing strategic IP portfolios to equip them for competition
with international companies.
They are mining, protecting, and enforcing domestic
IPR against non-Chinese enterprises as an effective way
to stake their position in the global marketplace.To further develop its IPR Action Plan, China recent-
ly issued the Further Implementation of the National
IPR Strategy Action Plan 2014-2020 (2020 Action Plan).
The 2020 Action Plan identifies four objectives, such
as to promote IP creation and utilization; strengthen
IP protection; strengthen IP management; and expand
international IP cooperation.
Under the 2020 Action Plan, too, Chinese enterprises
are actively developing IP portfolios to protect IPR both
domestically and internationally.
Chinese vs foreign fi lings
Recent statistics from the State Intellectual PropertyOffice (SIPO), demonstrate the rapid increase in patent
filings by Chinese enterprises to protect their tech-
nology assets, as compared to their foreign industry
counterparts.
For example, Figure 1 shows the increase of patent
application filings at SIPO for both Chinese and foreign
enterprises from 2003-2014.
In 2014, over 2.36 million patent applications were
filed before SIPO (about 2.2 million being filed by
Chinese enterprises), as compared to approximately
300,000 patent applications filed in 2003.
In the past 11 years, the number of patent applica-
tions filed by Chinese enterprises has grown at an
With China’s focus on developing a national plan topromote economic and technological developmentthrough the protection and enforcement of intel-lectual property (IP) rights (IPR), non-Chinese enterprises must
understand the available forms of IP protection in the country.
According to the World Bank, since initiating market reforms in
1978, China has shifted from a centrally planned to a market-based
economy, and has experienced rapid economic and social growth.
Since 2010, China’s GDP growth has averaged about 10% a
To remain competitivein the Chinese market,
foreign oil and gas
enterprises must protect
their intellectual property
rights in China, explain Brad
Chin and Kevin Tamm of
Bracewell & Giuliani LLP.
GEOGRAPHICAL FOCUS: CHINA
ProtectingIPR in China
2 00 3 2 00 4 2 0 05 2 0 0 6 2 00 7 2 00 8 20 0 9 2 0 10 2 01 1 2 01 2 2 01 3 2 01 4
By Chinese
By Foreigners
Total
0
0.5
1.0
1.5
2.0
2.5
M i l l i o n s
Patent applications filed in China
0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
M i l l i o n s
Patents granted in China
2 00 3 2 0 0 4 2 0 05 2 00 6 2 0 07 2 00 8 2 0 09 2 01 0 2 01 1 2 01 2 2 0 13 2 01 4
Chinese
Foreigners
Total
Fig. 2: Patents SIPO granted to domestic and foreign applicants.
Fig. 1: Patent applications filed before SIPO.
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filing of the complaint, compared to at least two years
in the US.
However, the adjudication of an action (for example, a
patent infringement case) in China is routinely delayed
for one to two years by a concurrent patent invalidity
challenge, which can only be conducted by SIPO.
In the US, a patent infr ingement case is less often
stayed pending a concurrent determination by the US
Patent & Trademark Office of a patent invalidity chal-lenge, than through a reexamination proceeding.
China’s recent move to strengthen IP protect ion by
enhancing speedy enforcement of IPR further shows
the importance for foreign enterprises to understand
IPR acquisition and enforcement.
In an attempt to answer criticism that it has been lax in IPR
protection, China, in 2014, established three specialized courts
in Beijing, Shanghai, and Guangzhou to handle IP cases.
Figure 3 shows the fast-growing number of patent infringe-
ment cases filed in Chinese civil courts by Chinese and foreign
patent holders.
Chinese civil courts entertained 9648 patent infringement
cases in 2014, a growth rate of 464%, as compared to only 2080 being filed in 2002. Similarly, patent right disputes are increasing
in the administrative track of the Chinese IP enforcement system.
For example, 4684 patent infringement cases were filed
before administrative agencies in 2013, more than double from
2012. Similar trends are observed in relation to the enforce-
ment of trademarks and copyrights in China.
Conclusion
These growth rates in patent filings (i.e., IPR protection) and
enforcement of IPR through administrative agencies and civil
court proceedings demonstrate that a foreign company seeking
to enter the Chinese market must select the most effective form
of IPR protection for its technology.In addition, understand the procedural advantages and chal-
lenges associated with the use of administrative act ions and
judicial proceedings to maintain an equal footing with Chinese
enterprises.
Non-Chinese firms must also develop relationships with
local Chinese industry partners and legal representatives, as
well as gain an understanding of the judicial requirements for
protecting their IPR in China. AOG
Brad Chin is a partner and the IP practice
group head at Bracewell & Giuliani LLP. He
has global IP practice with an emphasis on
patent protection and portfolio management for the US and international (China, South
Korea, Japan, and the Middle East) clients.
Chin is also a former US Patent & Trademark
Office Patent Examiner.
Kevin Tamm is a US registered patent
attorney practicing as an associate with
Bracewell & Giuliani LLP. He counsels clients
regarding patentability and intellectual
property asset management in the areas of
energy, oil and gas and petrochemicals.
average annual rate of 21.9%, as compared to 10.2% for foreign
enterprises.
Similarly, the number of patents granted by SIPO has increased
in the past decade, as indicated by Figure 2. In 2014, over 1.3
million patents were granted by SIPO and about 1.2 million of
which were granted to Chinese enterprises.
The number of patents granted to Chinese enterprises has in-
creased at an average annual rate of 21.9% in the last decade, ascompared to 13.6% for foreign enterprises. Similar trends are
observed in relation to the filing for protection of trademarks
and copyrights in China.
Chinese enterprises are also act ively enforcing their IPR
against other Chinese enterprises and foreign enterprises to
improve their position in the global marketplace.
IPR enforcement
China provides two primary mechanisms to enforce IPR, such
as administrat ive agencies and judicial proceedings (i.e., civil
or criminal actions).
Provincial or city-level IP offices govern administrative IPR
enforcement. In an administrative procedure, a complainantmust provide some prima facie evidence of infringement to the
local agency.
Remedies include, for example, destruction of an infringing
product and/or the tooling to produce the infringing product,