P-61 DEPARTS ANGRA DOS REIS FOR THE CAMPOS …questoffshore.com/wp-content/uploads/QBDI1312.pdf ·...

December 2013

QUEST BRASIL DEEPWATER INSIGHTVol. 9, Issue 3

BRASIL DEEPWATER INSIGHT

Subscriptions: Quest Offshore Resources, Inc. publishes BrasilDeepwater Insight in electronic format once per month. Subscrip-tions are available @ $950/yr for 12 issues. Multi-user licenses arenegotiable on an individual basis.

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© 2013 Quest Offshore Resources, Inc.

David C. M. ThomasSenior Editor

Paul H. HillegeistPresident, COO

John ChadderdonCEO

Nick SearchVice President Sales

P-61 DEPARTS ANGRA DOS REIS FOR THE CAMPOSBASIN PAPA-TERRA FIELD

Corporate Headquarters:www.questoffshore.com

1600 Highway 6, Suite 300Sugar Land, TX 77478, U.S.A.

Voice: +1 (281) 491-5900Fax: +1 (281) 491-5902

Brasil Bureau:Qbr Empreendimentos

Romero BritoRua João Pessoa, 338/505

24.220-331 Niterói RJ, BrazilTel. +55 21 3619-2344

Email:- [email protected]

Continued on page 2...

BrasFels completed the construction of platform P-61,which departed Angra dos Reis Bay on Dec. 31, 2013.The unit will make a technical stop for diesel and waternear Ilha Grande and continue on until its finallocation, the Papa-Terra field in the Campos Basin.The journey will take about six days after leaving theshipyard.

This is the first TLWP platform (Tension Leg WellheadPlatform) to be built and operated in Brasil. The P-61will operate together with the P-63 FPSO unit, whichcommenced oil production in Papa-Terra on November11. Together, the units have the capacity to produce140,000 BOPD via 18 wells.The TLWP has a lowerrange of motion compared to alternatives, allowing theuse of dry trees, which are deployed on the deck ofTLWP rather than on the seabed. Petrobras notes thatthis arrangement easier well intervention through the use of submerged centrifugal pumps.

All the P-61 production will be transferred to the P-63 to process, store and offload extracted oil to shuttletankers. The P-63 can also compress 1 million cu. m/d of natural gas and the excess gas consumed on theplatforms will be injected into the reservoir.

The P-61’s deck and four modules were built in Singapore, Asia.Two of the modules drive and control the submergedcentrifugal pump (SCP) of the wells, while the two others distribute electricity and provide platform/accommodationcontrol, respectively. They were brought to the BrasFels Shipyard, in Angra dos Reis (RJ) where BrasFels builtthe hull. BrasFels was responsible for topsides integration.

Source: Petrobras

2QBDI December 2013


CONTRACTS, ACQUISITIONS & INVESTMENTS

MARKET HIGHLIGHTS

P-61, which will be moored in 3,937 FSW (1,200 MSW),will be able to produce 100,000 BOPD. The platformcan produce 6,000 kW of electrical power via threeonboard generators, and receive up to 35 MW from theP-63 for processing. The 23,000-ton platform hasaccommodations for 60 people.

At peak construction, the P-61 generated 2,450 direct

jobs and 7,350 indirect jobs. Local content of its servicesreached 65%.

The Papa-Terra field, operated by Petrobras (62.5%) inpartnership with Chevron (37.5%), is located 110 kmoff the Brasilian coast, in depths of water between 1,312FSW to 4.593 FSW (400 MSW and 1,400 MSW).

PETROBRAS FINALIZES SALE OF BC-10 TOSHELL & ONGCPetrobras finalized the sale of its 35% stake in theParque das Conchas (BC-10) offshore project for $1.636billion on Dec. 30, 2013.In August 2013, Petrobrassigned an agreement to sell its 35% stake in the block,subject to government approval and the preemptiverights of its partners. Shell and ONGC Videsh decidedto buy out Petrobras, acquiring stakes of 23% (Shell)and 12% (ONGC Videsh).

The Brasilian Petroleum Agency (ANP) grantedapproval on December 18.

In 2013, the contribution of BC-10 to Petrobras averageoil production volume was 8,600 BOPD.

BW OFFSHORE ACQUIRES 30% STAKE INPOLVO FIELDBW Offshore inked a Letter of Intent to acquire 30% of

the Polvo oil field in Brasil. The definitive agreementsare still subject to a due diligence process to be conductedby BW Offshore, and remains subject to regulatory,governmental and board approvals.

Following the ongoing sale of BP’s stake in the Polvofield to HRT Participações em Petróleo S.A. (HRT), BWOffshore has the intention to acquire half of HRT’sstake. BW Offshore owns and operates the FPSOPOLVO, operating under a firm contract until Q3 2014,with additional options until Q3 2022.

The Polvo oil field is located in the Campos basin inBrasil. The field was brought onstream in 2007, with a2013 year-to-date production of approximately 12,000BOPD. The field installations include the FPSO POLVO,the Polvo A wellhead platform with a drilling rig andan infield pipeline.

PETROBRAS DECLARES FRANCO, SUL DETUPI COMMERCIALPetrobras submitted the declaration that the oil andgas accumulations of Franco and Sul de Tupi arecommercially viable to Brasil’s National Petroleum,Natural Gas and Biofuels Agency (ANP). In the proposalsent to the ANP, the names suggested for the new fieldswere Búzios and Lula Sul for Franco and Sul de Tupi,respectively.

The volume contracted through the Transfer of RightsAgreement for Franco area, 3.058 Bboe, was confirmedin the exploratory phase. The pre-salt reservoirs in thisfield contain good quality oil (between 26-degree and

28-degree API). During the execution of the FrancoMandatory Exploratory Plan, Petrobras acquired 3Dseismic data for the entire area and drilled twomandatory and six additional wells, with the objectiveof delimiting and characterizing the reservoirs. Anextended formation test was also performed.

Búzios field is some 200 km off the coast of Rio de Janeirostate at a water depth ranging from 5,249 FSW to6,890 FSW (1,600 MSW to 2,100 MSW). Petrobrasexpects to bring five production systems onstream forthis field progressively from Q3 2016 to Q4 2019.

The volume contracted through the Transfer of Rights

3QBDI December 2013


TABLE OF CONTENTS

Agreement for the Sul de Tupi area, 128 MMboe, wasconfirmed during the exploratory phase. The pre-saltreservoirs in this field contain good quality oil (27º API).Petrobras acquired 3D seismic data for the entire areaand drilled a well, as stipulated in the MandatoryExploratory Plan.

Lula Sul field is around 300 km off the coast of Rio deJaneiro state at a water depth of approximately7,218 FSW (2,200 MSW).

Production in the Lula Sul field will be based on thesame production system planned for the Extremo Sulmodule of Lula field. Petrobras forecasts the first oilfrom this system for Q1 2017.

PETROBRAS CONFIRMS SUCCESSFUL MOITABONITA EXTENSION WELLPetrobras reveals that the first extension well 3-BRSA-1194-SES (3-SES-178) drilled in the Moita Bonita area,on concession BM-SEAL-10, has confirmed theextension of the gas and light oil discovery. The well,known as Moita Bonita-1, is located in ultra-deep watersof the Sergipe-Alagoas Basin. Fifty-meter thickreservoirs were discovered featuring good permeabilityand porosity, confirming the project´s expectations.

The well is 83 km off the Aracaju coast, 7 km from thediscovery well Moita Bonita 1-BRSA-1088-SES (1-SES-

168), at a water depth of 9,186 FSW (2,800 MSW). TheMoita Bonita accumulation is part of the Sergipe-Alagoas Basin deepwater development program.

The consortium will proceed with the discoveryevaluation plan approved by the National Agency ofPetroleum, Natural Gas and Biofuels (ANP), whichcovers concessions BM-SEAL-10 and BM-SEAL-4.

Petrobras is the operator of both areas, holding 100%interest in BM-SEAL-10 and in partnership with ONGC(25%) in BM-SEAL-4.

BP TO RELINQUISH BM-CAL-13 FOLLOWINGDISAPPOINTING PITANGA WELLBP advises that the Pitanga exploration wellon BlockBM-CAL-13, in the Camamu-Almada basin offshoreBrasil, encountered oil shows but no commercialquantities of oil or gas. This result will cause BP torelinquish the BM-CAL-13 block.

The Pitanga well result will trigger a write-off of around$230 million related to the costs of drilling the well, aswell as a write-off of around $850 million associatedwith the value allocated to this block as part of theacquisition accounting related to the Devon deal, whichBP expects to treat as a non-operating item.

PETROBRAS FINALIZES SALE OF BC-10 TO SHELL & ONGC ....................................................................................................... 2BW OFFSHORE ACQUIRES 30% STAKE IN POLVO FIELD .............................................................................................................. 2PETROBRAS DECLARES FRANCO, SUL DE TUPI COMMERCIAL ................................................................................................. 2PETROBRAS CONFIRMS SUCCESSFUL MOITA BONITA EXTENSION WELL ............................................................................ 3BP TO RELINQUISH BM-CAL-13 FOLLOWING DISAPPOINTING PITANGA WELL ..................................................................... 3PETROBRAS STRIKES OIL PAY IN THE DEEPWATER POTIGUAR BASIN ................................................................................... 4KEPPEL, NATIONAL UNIVERSITY OF SINGAPORE INVEST IN CORE LAB ................................................................................ 4ANP GREENLIGHTS KAROON’S APPRAISAL WORK PROGRAM APPLICATION .......................................................................... 4BARCLAYS FORECASTS 6.1% GROWTH IN INTERNATIONAL E&P SPENDING ......................................................................... 4SIX HRT BOARD MEMBERS RESIGN .................................................................................................................................................. 5PETROBRAS NOVEMBER 2013 PRODUCTION UP 1.2% OVER OCTOBER 2013 .......................................................................... 5BRASILIAN PRESIDENT, PETROBRAS CEO MARK COMPLETION OF PLATFORM P-62 ........................................................... 6P-55 SEMI COMMENCES OPERATION ON RONCADOR FIELD ...................................................................................................... 6BG GROUP CONFIRMS DOC FOR BM-S-9 CARIOCA AREA FIELD ................................................................................................. 6OGX COMMENCES PRODUCTION FROM TUBARAO MARTELO FIELD ........................................................................................ 6PETROBRAS TAPS NORSKAN FOR TWO AHTS VESSELS ............................................................................................................... 7SIEM OFFSHORE SNARES CONTRACT FROM PETROBRAS FOR PSV SIEM ATLAS ................................................................. 7PROSAFE GRABS $179MM CONTRACT EXTENSION FROM PETROBRAS ................................................................................... 7SPECTRUM, CGG LAUNCH 3D SURVEY OFFSHORE BRASIL ........................................................................................................ 7DAMEN DELIVERES FIFTH PSV IN SERIES TO WORLD WIDE SUPPLY ...................................................................................... 7

4QBDI December 2013


PETROBRAS STRIKES OIL PAY IN THEDEEPWATER POTIGUAR BASINPetrobras hit oil pay on concession BM-POT-17, the firstin the deepwater of Potiguar Basin, in its portion locatedin the state of Rio Grande do Norte. The discovery wasmade while drilling well 1-BRSA-1205-RNS (1-RNS-158), informally known as Pitu, at a water depth of5,679 FSW (1,731 MSW) and 55 km off the coast of RioGrande do Norte state.

The oil column was confirmed through log data andfluid samples, which will be characterized throughlaboratory analysis. The well is currently being drilledat a depth of 4,197 meters and drilling will proceed until5,028 meters.

Petrobras is the operator of the concession with 80%stake and Petrogal Brasil S.A. holds the remaining 20%.Due to the farm-out agreement in progress, and afterobtaining the approval from the National Agency ofPetroleum, Natural Gas and Biofuels (ANP), BP Energydo Brasil Ltda will join the consortium and interests ofthe partners in the block will be: Petrobras - 40%, BP -40% and Petrogal - 20%.

The consortium will proceed with operations to completethe well drilling until the planned depth, verify theextension of the new discovery and characterize theconditions of the reservoirs.

KEPPEL, NATIONAL UNIVERSITY OFSINGAPORE INVEST IN CORE LABSingapore rig builder Keppel Corp established a CoreLab with the National University of Singapore (NUS)to carry out research & development for oil and gasexploration in new frontiers including the ultra-deepwaters and the Arctic area. The company expects theS$75 million ($59.7 million) Keppel-NUS Core Lab tosend researchers to study deepwater regions off Brasiland the harsh environment of the Arctic.

Keppel Corp chief executive Choo Chiau Beng said themove is part of the shipyard and marine group’sstrategy to stay ahead of competition and providesolutions to the global oil and gas industry ashydrocarbon prospecting advances into morechallenging environments.

ANP GREENLIGHTS KAROON’S APPRAISALWORK PROGRAM APPLICATIONKaroon Gas Australia received written notification fromthe Agência Nacional do Petróleo (ANP) that theDiscovery Appraisal Plan (PAD) forblocks S-M-1101,

S-M-1102, S-M-1037, S-M-1165 and S-M-1166 hasbeen approved.

The PAD governs the next stage of the ConcessionAgreement and outlines the forward appraisal workprogram commitments Karoon will undertake on theBlocks. The work program comprises of anumber of firmcommitments to be completed by Dec. 31, 2014 andcontingent commitments,to be completed by Dec. 31,2016.Approval of the PAD was the final regulatoryhurdle to be cleared prior to contracting a rigandcommitting to the Phase 2 exploration and appraisaldrilling campaign.

Karoon is required to complete the following by Dec.31, 2014: drill Kangaroo-2 appraisal well; drill theKangaroo West-1 exploration well; conduct seismicreprocessing and quantitative inversion (QI) studies onthe Bilby discovery; conduct seismic reprocessing andQI studies on the Emu and Emu East prospects; andconduct basin modeling studies.

The company’s 2015/2016 Contingent Commitmentsmay include: QI studies at Kangaroo and KangarooWest following the 2 firm wells; drilling Kangaroo-3,Kangaroo West-2, updip Emu-2 and / or Emu East-1.

The PAD consolidates the Blocks into one work programwhich, following the integration and analysis of resultsfrom the firm commitment period, provides Karoon themaximum flexibility tofocus the contingent workprogram on those projects that present the best potentialdevelopmentopportunity.

Karoon has commenced preliminary engineeringstudies to examine the technical challenges ofdrillingthese targets, and is also making preparations for atargeted 3D seismic acquisition expectedto commencemid-2014.Seismic processing and interpretation, as wellas the engineering studies are expected to be completedby H1 2015.

BARCLAYS FORECASTS 6.1% GROWTH ININTERNATIONAL E&P SPENDINGBarclays Global E&P Spending Outlook, a survey ofover 300 oil and gas companies, forecasts total 2014expenditures of $723,311 million, up 6.1% over 2013expenditures of $681,690 million. The SpendingOutlook notes that surveyed companies are basing theirspending plans on $98 Brent, $89 WTI and U.S. naturalgas prices of $3.66.

The Middle East and Latin America are forecast to leadthe spending increase with 14.4% and 12.8% increasesin regional spending. Saudi Aramco and Kuwait Oil

5QBDI December 2013


Co. are expected to drive the increases in the MiddleEast, while PEMEX and PDVSA are expected to driveLatin America. The Spending Outlook notes thatPetrobras “remains in a relative holding pattern.”

Other significant increases are forecast for Russia andEurope with projected increases of 10.9% and 7.8%,respectively. Spending in India/Asia/Australia isforecast to increase by 1.2%, while spending in Africais projected to increase by 0.4%. The Spending Outlookreveals that increases from Petronas, Pertamina andONGC will be partially offset by declines from Inpexand Santos, and relatively flat plans from ChineseNational Oil Companies (NOC).

The U.S. is expected to rise by 8.5%, while NorthAmerican spending overall is expected to increase by7.3%. The Spending Outlook highlights that the U.S.Gulf of Mexico remains a bright spot with 17 floatersscheduled to mobilize to the region through Q1 2015.A total of 58 deepwater rigs are expected to be contractedover the next year and a half. Meanwhile, expendituresin Canada are expected to increase by 3% followingtwo years of declines.

Surveyed companies eye improved economics, bothinternationally and domestically. A total of 63% ofsurveyed companies responded that internationaleconomics are “excellent” or “good,” while 65% ofcompanies responded that U.S. economics are “excellent”or “good.”

The Spending Outlook believes that actual 2014spending will be higher than estimates. The Surveynotes that since 2000, spending fell short of estimatesduring only two years – 2010 and 2012. The Surveyadvises, “The outcome for 2013 appears poised to resumethe long-standing pattern where actual spendingoutpaces our forecast. Our original spending estimatefor 2013, released last December, suggested year overyear growth of 6.6% for global E&P spending with mostof the uptick driven by international markets while theU.S. and Canada remained flat. Our most recentdiscussions with the E&Ps indicate that global spendingincreased 7.4% in 2013 from 2012 as spending gains inthe international and U.S. markets will likely exceedour original forecast from last year.”

SIX HRT BOARD MEMBERS RESIGNHRT Participações em Petróleo S.A. advises that six ofits independent members of its Board of Directors haveresigned. The company received Letters of Resignationon Dec. 22, 2013, from Thomas W. Ebbern, Peter L.O‘Brien, Joseph P. Ash, François Moreau, CharlesLaganá Putz and Oscar Prieto.

On Dec. 20, 2013, a majority of the Board had approvedthe following motion: “To acknowledge that the electionof Messrs. Edmundo Falcão and Marcello Pacheco isnull and void, and that they should cease to be membersof the Fiscal Council and be considered as such; Messrs.François Moreau and Oscar Prieto should be suspendeduntil the next Shareholder´s Meeting and shall refrainfrom exercising the prerogatives they would be entitledto, if they had been properly elected; To instruct theCompany to seek the reimbursement of thecompensation and costs, and all payments made toMessrs. Marcello Pacheco and Edmundo Falcão; Toreschedule the Shareholder´s Meeting and adjust theagenda and to publish a Material Fact, given that it isin the best interest of the company and its shareholdersto allow shareholders to vote all of the relevant matterswith a fully informed basis.”

PETROBRAS NOVEMBER 2013 PRODUCTIONUP 1.2% OVER OCTOBER 2013Petrobras’ November 2013 total oil and natural gasoutput in Brasil was 2,342,000 BOEPD, up 1.2% fromthe 2,315,000 BOEPD extracted during the prior month.Including the share operated by Petrobras for itspartners, the increase in production over October was1.9%. Oil output exclusively from Petrobras’ fields inBrasil averaged 1,957,000 BOPD, relatively flatcompared to October’s output of 1,960,000 BOPD.

The new monthly and daily pre-salt output record of339,100 BOPD and 362,300 BOPD, respectively,contributed to the stable oil output in November, inaddition to the start-up of platform P-63 in the CamposBasin Papa-Terra field, which took place onNovember 11.

Petrobras also noted the start-up of new wellsinterconnected to the platforms P-26, in Marlim, andP-53, in Marlim Leste, as part of the complementarydevelopment of these Campos Basin fields. DuringNovember, the company also started the Extended WellTest (EWT) of Lula Extremo Sul in the Santos Basinpre-salt area via the FPSO CIDADE DESAO VICENTE.

During November, Petrobras conducted scheduledmaintenance shut-ins of Northeast Polo, FPSOCIDADE DE ANCHIETA and P-53.

6QBDI December 2013


FIELD DEVELOPMENT

BRASILIAN PRESIDENT, PETROBRAS CEOMARK COMPLETION OF PLATFORM P-62The Brasilian President, Dilma Rousseff, and thePetrobras CEO Maria das Graças Silva Foster, markedthe completion of the P-62 platform at the Atlântico SulShipyard (EAS) in Ipojuca (PE) on Tuesday, Dec. 17,2013. After unveiling the commemorative plaque forthe completion of the P-62 work, the president pointedout that 7,000 people were employed in the shipbuildingindustry in 2003 and today there are 79,000 employees.“With oil being extracted from the pre-salt at anincreasing rate and scale, Brasil will become the largestoil producer from platforms in the twenty first century,”she said. Six to seven drilling rigs and 19 oil tankerswill be built at the Atlântico Sul Shipyard over the nextfew years, the President said.

The P-62 has a daily production capacity of 180,000barrels of oil and 6 MMcm of gas. The work hasgenerated about 5,000 direct and 15,000 indirect jobsand has achieved approximately 63% domestic content.The unit is expected to come on stream during Q1 2014.

P-55 SEMI COMMENCES OPERATION ONRONCADOR FIELDThe Petrobras’ P-55 platform commenced operation onDec. 31, 2013. inthe Campos Basin’s Roncador field.P-55 is part of Roncador´s field Module 3 project and willbe connected to 17 wells, 11 of which are oil and gasproduction and 6 water injection. Oil and natural gaswill be transported from the platform via submarinepipelines connected to the unit till the oil and gasoffloading system of the Campos Basin.

P-55 is a semisubmersible unit installed at a water depthof 5,906 FSW (1,800 MSW), with daily processingcapacity of 180,000 barrels of oil, compressing 6,000,000cu. m of natural gas and injecting 290,000 barrelsof water.

Weighing 52,000 tons and with an area of 10,000 cu.m, P-55 is the biggest semi platform ever built in Brasiland one of the biggest of its kind worldwide.

Construction work on P-55 is part of the BrasilianFederal Government’s Growth Acceleration Plan – PAC.The construction and integration of platform moduleswere carried out entirely in Brasil, boosting the localcontent rate to 79%. Construction work generated 5,000direct and 15,000 indirect jobs.

The new unit will operate alongside platforms P-52 andP-54, which are already installed on the Roncador field,and with platform P-62, that left the Atlântico SulShipyard, in Ipojuca (state of Pernambuco) on Dec. 30,2013, and is moving toward its location in Module IV ofthe field.

BG GROUP CONFIRMS DOC FOR BM-S-9CARIOCA AREA FIELDBG Group confirms that its partner Petrobras, theoperator of block BM-S-9 in the pre-salt Santos Basin,has submitted a Declaration of Commerciality (DoC) tothe Brasilian National Agency of Petroleum, NaturalGas and Biofuels (ANP), for the oil and gasaccumulations in the Carioca area, offshore Brasil. Aspart of the DoC, the consortium has suggested that thenew field be named Lapa.

The Lapa field is located approximately 270 km off thecoast of São Paulo state, in water depths of around7,021 FSW (2,140 MSW). The DoC notification to theANP also includes the operator’s estimates of totalrecoverable volumes associated with the initial stage ofdevelopment.

BG Group is working with the consortium partners toachieve further optimization of the development planfollowing encouraging results from the recent CariocaSW appraisal well drilled in October 2013. TheDevelopment Plan for the Lapa field will be submittedfor ANP approval within the next 180 days.

Petrobras (45%) operates the BM-S-9 concession. BGGroup (30%) and RepsolSinopec Brasil (25%) arepartners in the license.

OGX COMMENCES PRODUCTION FROMTUBARAO MARTELO FIELDOGX advises that production commenced from theTubarão Martelo field, located in the Campos Basinblocks BM-C-39 and BM-C-40. The field is producingthrough the horizontal well TBMT-8H.

On Nov. 29, 2013 the company received the operatinglicense from IBAMA (the Brasilian Institute forEnvironment and Renewable Natural Resources),authorizing the operation of FPSO OSX-3 and therespective subsea structures related to the oil productiondevelopment and outflow for the BM-C-39 and BM-C-40 blocks, located in the Campos Basin.

7QBDI December 2013


MARINE CONTRACTING

PETROBRAS TAPS NORSKAN FOR TWO AHTSVESSELSDOF’s subsidiary Norskan seized two new four-yearcontracts from Petrobras for the AHTS vessels SKANDIFLUMINENSE and SKANDI RIO. The contracts willstart in direct continuation after finalization of theprevious contracts with Petrobras, in Q1 2014 and inH2 2014, respectively. DOF Subsea Brasil will operatethe ROV’s on both vessels. Total contract value isapproximately NOK1.3 billion ($211.5 million).

SIEM OFFSHORE SNARES CONTRACT FROMPETROBRAS FOR PSV SIEM ATLASSiem Offshore and Petrobras have entered into acharter agreement for the Platform Supply Vessel (PSV)SIEM ATLAS. The charter period has commenced andis for a firm period of two years. Petrobras has an optionto extend the charter for two additional years, uponterms to be mutually agreed.The gross contract valuefor the firm period is approximately $26 million.

PROSAFE GRABS $179MM CONTRACTEXTENSION FROM PETROBRASProsafe seized a $179 million contract extension byPetrobras Netherlands B.V. (Petrobras) for the provisionof the SAFE CONCORDIA semisubmersible vessel forsafety and maintenance support offshore Brasil. Thefirm period of the contract extension is three years andcommences in June 2014, immediately following expiryof the existing contract firm period.

Prosafe states that the award of this contract extension

demonstrates the continued long-term demand forsafety and maintenance support services within Brasil.

SPECTRUM, CGG LAUNCH 3D SURVEYOFFSHORE BRASILSpectrum and CGG are jointly launching a large, high-end BroadSeis3D multi-client survey program offshoreBrasil that will focus on a large proportion of openacreage in the very promising Foz do Amazonas Basin.The two companies are working as equal partners onthis project, which has received high prefunding froma number of major industry players.

Covering 11,330 sq. km, the Foz do Amazonas surveywill be acquired by the OCEANIC ENDEAVOURdeploying Sercel’s next-generation Sentinel RD solidstreamer and is expected to start in January 2014. Thehigh-end BroadSeis data set will be processed in CGG’sRio de Janeiro subsurface imaging center.

DAMEN DELIVERES FIFTH PSV IN SERIES TOWORLD WIDE SUPPLYDamen Shipyards Group delivered the WORLD OPAL,the fifth Platform Supply Vessel (PSV) in a series ofsix, to World Wide Supply of Norway during earlyDecember. WORLD OPAL is a Damen PSV 3300 CD.The first ship, World Diamond, was delivered in Julyand the last in the series, WORLD SAPPHIRE, is dueto be delivered mid-December.

Four of the six World Wide Supply PSV 3300s havesecured long-term contracts supporting Petrobras,offshore Brasil. The remaining two are expected to beoffered to the North Sea spot charter market.

8QBDI December 2013


MARKET OVERVIEW & FORECAST

OffshoreMarineConstructionVessels

©2013 Quest Offshore Resources, Inc. 1

South AmericaSouth America Forecast FPS Spending by Year Million of US Dollars by FPS Award Year (Mean Case)

South America continues to be

the engine of the FPS market

dominated by the utilization of

FPSO’s in the Brazilian Pre-Salt.

Multiple FPSO orders for many

projects at the same time will

cause this spending to be lumpy.

Recent decreases in Petrobras’

forecasts coupled with local

supply issues should hamper

growth.

Source file: Award_Working_Q3_2013.xls

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Th

ou

san

ds o

f U

S D

oll

ars

Hull Award Year

FPSO FPS-Semi Spar TLP


South AmericaSouth America FPS Awards 2004– 2017 (e) Mean CaseBy FPS Type

The pre-salt play will be the

engine of South American FPS

demand, while traditional

developments will continue to

provide opportunities for FPS

contractors.

Source file: Award_Working_Q3_2013.xls

0

2

4

6

8

10

12

14

16

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Nu

mb

er

of

FP

S U

nit

s

Hull Award YearFPSO FPS-Semi Spar TLP

9QBDI December 2013




South America South America Forecast Floating Activity by Startup Year 2004-2017 (e)

Area Activity Share By Type (Mean Case)

Source file: Start_Up_Working_Q3_2013.xls

0

2

4

6

8

10

12

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Nu

mb

er

of

FP

S U

nit

s

Startup Year

FPSO FPS-Semi TLP


South AmericaSouth America Forecast FPS Construction by Startup Year 2013-2017(e)

Mean Case 30 Units, 25 Under Construction

Source file: Start_Up_Working_Q3_2013.xls

0

5

10

15

20

25

30

35

40

2013 2014 2015 2016 2017 2008-2012 Total 13-17e

Nu

mb

er

of

Un

its

Startup Year

Units Under Construction Forecast Demand FPS Units Flowing

10QBDI December 2013




South America Subsea Forecast Award Comparison2000-2017e Awards (1,904 Trees*)

•2013-2017 Awards = Mean Case ROW = Rest Of World. Pie Chart = 2013-2017e Mean Case Forecast

Source: Quest_Subsea_Forecast_Awards Nov 2013.xls

0

100

200

300

400

500

600

700

800

900

# o

f S

ub

sea

Tre

es

Award Year

SAM Tree Orders (Awarded) SAM Tree Orders (Forecasted Mean)

ROW Tree Orders (Mean) SAM Tree Orders (High)

SAM Tree Orders (Base)

Brazil

93%

Trinidad &

Tobago

1% Other

6%


South America Subsea Tree Startups by Water Depth1996-2018e Startups – Normalized Case

Source: HolyGrail_Nov 2013.xls

0

20

40

60

80

100

120

140

160

180

200

19

96

19

97

19

98

19

99

20

00

20

01

e

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

e

20

14

e

20

15

e

20

16

e

20

17

e

20

18

e

# o

f S

ub

sea

Tre

es

Startup Year

0-1000fsw 1001-5000fsw 5001+fsw





South America Consolidated Market ShareQ4 2011-Q3 2012 Vs. Q4 2012-Q3 2013

120 Subsea Trees

199 Subsea Trees

Source: Quest_Subsea_MarketShare_Nov 2013.xls

AS = Aker Solutions; OneSubsea = OneSubsea DQ = Dril-Quip; FTI = FMC Technologies; GE = GE Oil & Gas

AS DQ FTI GE OneSubsea

Q4 2011-Q3 2012 0% 0% 67% 8% 25%

Q4 2012-Q3 2013 40% 0% 27% 0% 33%

0%

10%

20%

30%

40%

50%

60%

70%

% M

ark

et

Sh

are

Tree Mfg


South America Subsea Tree, Control & Manifold CAPEX2000-2017e Mean Case Awards ($9.6bn Forecast)

Source: Quest_Subsea_Forecast_Awards Nov 2013.xls

Includes hardware costs for subsea tree, subsea control system and manifold only – does not represent total contract value for system

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

0

50

100

150

200

250

Va

lue

($

MM

)

# S

ub

sea

Tre

e &

Co

ntr

ol S

yst

em

s (M

ea

n C

ase

)

Award Year

SS Tree & Control System ($MM) Subsea Manifold ($MM) # SS Tree & Control Systems



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Quest Offshore Resources(Corporate Headquarters)1600 Highway 6, Suite 300

Sugar Land, TX 77478, U.S.A.Tel: 1(281) 491-5900Fax: 1(281)491-5902

Quest Offshore Resources(International Sales Office)

57 Rose BushesEpsom Downs, Surrey KT17 3NT UK

Tel: 44 (0) 1737 371704 or +1 (281) [email protected]

www.questoffshore.com

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