EXPLORATION | DRILLING | PRODUCTION FEBRUARY 2017

THE BLACKSHARK
WELLBORE INTERCEPT
SYSTEM BY
 IS IN YOUR WELL?

ENERGY CHEMISTRY TECHNOLOGIES

DRILLING TECHNOLOGIES
PRODUCTION TECHNOLOGIES

www.otekind.com

DRILLING
D RILLING & S T I M U L AT I O N
STIMULATION
COMPLETION & PRODUCTION

Cement Additives:
improves cement Drilling Chemicals: Production Chemicals:
performance and bonding Inc
Increase drilling speed, efcient cuttings fewer interventions and more
for better zonal isolation. removal
rem
re moval and reduce downtime. production.

Casing Accessories:
ensure the integrity of
the well construction and
cementing operations.

Drilling Motors: Downhole Drilling Tools: T Stimulation Chemicals:

Sti
Stimu
vertical and directional motors full range of drill string
g components to increase
increa
inc a load recovery,
with Sealed Bearing and Mud make drilling more efcient
cient and reduce hydrocarbon
hydro
hyd ro production, lower
Lube congurations. non-productive time. pumping friction and increase ROI.

Teledrift Measurement While Stemulator: Articial Lift:

Drilling: improve penetration rate ate by inducing
induc
in ing axial
ducing axial novel pump systems, reliable
continuous measurements to surface vibration in the drill string
ng to reduce friction
ring
ri support to help lower cost, improve
while drilling, satellite-based remote drag and sticking. reliability and deliver more
monitoring and certication for faster production.
and more accurate drilling.
39 55

03 Comment
Contents 29 Advancements in automation
February 2017
Volume 10 Issue 02

Jan Einar Gravdal, IRIS, Norway, introduces a research infrastructure for

drilling automation.
05 World news

10 Looking ahead in Asia

Michelle Gomez, Douglas-Westwood, provides an overview of the upstream 31
industrys prospects in Asia.
This feature showcases technologies designed to handle the harshest
conditions faced by the global oil and gas industry. Contributions come
13 Squeezing value from well data from:
Mario Chiaramonte, Alberto Martocchia, Andres Matheson and GustoMSC Staying stable in harsh environments Rutger Baan,
Alan Morrison, Geolog International, describe how surface logging can demonstrates how jack-ups and semisubmersible rigs have been adapted
provide cost savings and drilling efficiency through the use of innovative to withstand the harshest of environmental conditions.
interpretation models and modern technology. Oliver Valvetek Futureproofing subsea valves Paul Shillito explains
how the evolution of design, production and testing processes is allowing
19 Fighting against friction valves to keep pace with industry demands.
Aref Alali, Rubicon, USA, investigates downhole friction reduction technology
and explains how a new axial-vibration tool can help operators in extended
reach wells.
39 Automated operations
Angelo Calderoni, Drillmec, explains how automated operations are
improving drilling standards and efficiency.
23 Addressing drilling challenges
Roar Malt, Eric Claudey and Behzad Elehifar, Enhanced Drilling, Norway,
explain how the latest generation of dual gradient and managed pressure
43 Remediating wellbore damage
drilling technologies are increasing safety and certainty while enabling Enrique Proao, Cudd Energy Services, and Dr. Neeraj Khanna,
operators to drill the undrillable. Robert Picek, and Ben Whyatt, Bio-Cide International, describe a new
approach to remediating wellbore damage in fractured wells.

47 Getting a breakdown on biocides

Cameron Campbell, Mike Hurd, and Angela Cooper, Kemira, investigate
preservative biocide usage across the full spectrum of oilfield operations.

51 Delving deeper into DCTD

OILFIELD TECHNOLOGY

Front cover Andrew OBrien, AnTech, UK, explains why DCTD applications are so
relevant to todays oil and gas industry.
FEBRUARY 2017
Scientific Drillings EXPLORATION | DRILLING | PRODUCTION

BlackShark Wellbore 55 Overcoming decommissioning difficulties

Intercept System is designed John Fraser, Coretrax, UK, explains how innovative technology is the key to
FEBRUARY 2017 | EXPLORATION | DRILLING | PRODUCTION

to achieve first-attempt lowering well abandonment costs.

wellbore intersection by using
some of the industrys most
advanced downhole sensors 57 Safety pays
to deliver long-distance Oilfield Technology correspondent, Gordon Cope, explains that while
magnetic ranging placing a value on safety in the oil and gas industry is a complicated
business, new software is making it easier.
measurements.

From relief well applications 61 Making HSE manageable

to plug and abandonment Simon Rooks, Tyco, discusses the importance of asset management when
projects, Scientific Drillings it comes to health and safety in the oil and gas industry.
www oilfieldtechnology com

BlackShark is the most

precise no-access magnetic THE BLACKSHARK
WELLBORE INTERCEPT
ranging tool available on the SYSTEM BY

market today.

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 Comment David Bizley, Editor
February 2017
Contact us
david.bizley@oilfieldtechnology.com
Editorial
Managing Editor: James Little

A
s I write this, Donald Trump has been President of the james.little@oilfieldtechnology.com

United States for less than a month. Even so, after a rapid Editor: David Bizley
david.bizley@oilfieldtechnology.com
succession of executive orders, political appointments, and
typically frank tweets from the Commander-in-Chief himself, a Design
seismic shift in US policy on almost all levels has already begun. Production: Charlotte Reynell
Many of these developments cover areas well beyond the scope charlotte.reynell@oilfieldtechnology.com

of this publication, such as healthcare, immigration, and infrastructure. Yet it was on just
his fourth full day in office that President Trump made some of the most significant (or at Sales
least, highly politicised) changes that the US energy industry has seen in years when he Advertisement Director: Rod Hardy
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signed executive orders to advance the construction of the Keystone XL and Dakota Access
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had to endure its most severe downturn for decades, there could be a fly in the ointment. Business Development Manager: Chris Lethbridge
When completed, the aptly named Dakota Access pipeline will bring crude oil produced chris.lethbridge@oilfieldtechnology.com
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Speaking of getting things done, OPECs November decision to cut its output from Reprints:
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the start of 2017 continues to bear fruit. As prices remain fairly steady around US$55, US
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 THE
ResonATOR

IMAGINE IF YOU COULD

Learn more at www.rubicon-oileld.com

World news February 2017

Weatherford and Nabors form alliance for integrated In brief

drilling solutions
Weatherford and Nabors Industries have announced that they have signed a non-binding India
Memorandum of Understanding (MOU) to form an alliance focused on delivering enhanced The Indian government has announced
drilling solutions to the oil and gas land market in the lower 48 states of the United States. plans to merge its state-controlled oil
The MOU states that Weatherford will bring well construction expertise, managed and gas companies to create a new
pressure drilling (MPD) solutions, directional drilling capabilities and drilling hardware, as international company that can compete
well as associated software applications and engineering personnel. Nabors will bring its more effectively on a global stage.
fleet of MPD-ready SmartRigs and land-optimised measurement while drilling (MWD) According to the Financial Times,
systems, together with its performance drilling software applications, automated rig if ministers were to merge the eight
equipment and proprietary control systems. largest of Indias 13 state-controlled
We are very excited about the opportunity to strengthen our capabilities in the largest companies, it would result in a company
land market by jointly leading the creation of innovative integrated drilling solutions with with a market capitalisation of over
Nabors, said Krishna Shivram, CEO for Weatherford. The early entry into this emerging US$100 billion. In comparison, BP is
market will create a strong, new sales channel for our company, while allowing us to secure valued at US$116 billion.
market participation in a new service model increasingly demanded by our clients. Indias Finance Minister, Arun Jaitley
Anthony Petrello, CEO of Nabors stated that We are pleased to jointly present to the commented: We see opportunities to
market a broader scope of activities, while accelerating the introduction of a unique offering strengthen our central public sector
that, we believe, can more efficiently and cost effectively be delivered to operators through enterprises through consolidation,
our new SmartRig platform. mergers and acquisitions [...] It will
give them capacity to bear higher risks,
avail economies of scale, take higher
investment decisions and create more
UK subsea sector to Oceaneering signs E-ROV value for the stakeholders.
increase exports contract with Statoil
British subsea companies are expecting A subsidiary of Oceaneering has been Australia
to increase overseas activity in the next awarded a technology development TAG Oil Ltd has announced that its wholly
12 months, according to a survey conducted contract by Statoil. The contract provides owned Australian subsidiary, Cypress
by industry body, Subsea UK. for the development, manufacturing, Petroleum Pty Ltd., has closed the
Of the 300 member companies testing, and mobilisation of a self-contained, purchase of 100% interest in Petroleum
surveyed, 27% predict exports to increase by battery-powered work class remotely Lease 17 (PL 17) from Southern Cross
50% or more in 2017. More than half (56%) operated vehicle (E-ROV) system deployed Petroleum & Exploration Pty Ltd.
expect overseas sales to increase between on the seabed. The system will interface PL 17 is an oil and gas production
1% and 49% with only 17% not expecting with Oceaneerings onshore Mission Support permit and high-value exploration
any increase in export revenues. Center via a 4G mobile broadband signal acquisition that covers 104 km2
A third of companies surveyed do not transmitted from a buoy on the waters (25 700 acres) in the Surat Basin, one
yet know what effect Brexit will have on surface, without a surface vessel required of Australias first producing basins. It
their export plans, with 49% believing that it onsite. is located in a light-oil discovery trend,
will have no impact on their plans. Development, manufacturing, and and is on trend with the Moonie oilfield,
By comparison, 32% expect domestic pool testing will commence immediately in which has produced approximately
revenues to remain static in 2017 while Stavanger, Norway. An offshore mobilisation 25 million bbls to date. PL 17 contains
22% expect domestic sales to decline. test of the system is scheduled for May two undeveloped oilfields, the Bennett
The majority of those expecting domestic 2017. During the test, the E-ROV system will and Leichhardt fields, and the production
revenues to increase forecast between 10% be deployed and recovered from an IMR permit area is largely unexplored despite
and 30% additional revenues from the UK vessel at the Troll field in the North Sea. the proven and significant oil and gas
Continental Shelf. Export sales currently The system will perform specified subsea potential.
account for over half or more of the annual operations while continuous, uninterrupted This is TAG Oils second acquisition
turnover of 32% of respondents. control is maintained from onshore. since the beginning of 2016.

February 2017 Oilfield Technology | 5

 World news February 2017

Diary dates
Charter extension for
Bibby Topaz
21 - 23 February, 2017
IP Week Bibby Offshore has announced the
London, UK long-term extension to the charter of
E: joanne.mcbratney@hg3.co.uk its dive-support vessel Bibby Topaz,
www.ipweek.co.uk owned by Volstad Maritime. The terms
and conditions of the extended charter
22 - 24 February, 2017 arrangement have been adjusted to
reflect the current market environment
Australasian Oil & Gas and are now based on a more mutual
Perth, Australia
sharing of risk and reward.
E: aog@infosalons.com.au
www.aogexpo.com.au The extension allows Bibby Offshore
to maintain and grow the groups market
share in the North Sea DSV market. The
14 - 16 March, 2017 Bibby Topaz has been a core part of the
SPE/IADC groups fleet since its delivery in 2008, and
The Hague, The Netherlands has been identified as the best technical
E: service@spe.org and commercial option for the group.
www.spe.org The new contract allows exclusive and
uninterrupted access to this asset until
29 - 31 March, 2017 31 December 2019, with options to further
OMC 2017 extend the charter to the end of 2024.
Ravenna, Italy Howard Woodcock, CEO of
E: conference@omc.it Bibby Offshore, stated that the extension
www.omc2017.it would allow the group to continue to
deliver comprehensive support for clients
02 - 05 April, 2017 in this region.
TGS announces new US
GoM project
TGS has announced the Otos multibeam
and seep study project in the US Gulf of
Mexico (GoM).
Acquisition of the multibeam survey is
underway and is the first stage of a seep
and geochemistry programme covering
the US GoM. The survey is designed to
mirror the Gigante multibeam and seep
study in the Mexican GoM, conducted
in 2016. The new programme will cover
approximately 289 000 km2 and include
250 cores with advanced geochemistry
analysis.
TGS will continue to work with
the same acquisition providers as in
the Mexico programme, Fugro and
TDI Brooks. Final results in all areas
should be available in late 2017.
The programme will provide new
insight into the distribution of different
source rock geology throughout the US
GoM and link this in a consistent fashion
to the recent successful survey in Mexico,
commented Kristian Johansen, CEO of
TGS.

AAPG ACE
Houston, USA
E: mtaylor@aapg.org
www.ace.aapg.org/2017
Web news
highlights
Flexitallic unveils new offshore
corrosion sealing technology.
Harbour Energy to lead acquisition of
Shell UK North Sea Assets.
CCS appoints new business
development and advisory manager.
NEL to Lead Multiphase Flow
International Standard Development.
To read more about these articles
and for more event listings go to:
www.oilfieldtechnology.com
Statoil awards hook-up contract for Johan Sverdrup
Aibel and Aker Solutions have, on behalf of the licence partners, been awarded contracts
for hook-up and commissioning assistance for the Johan Sverdrup field centre, Phase 1.
The contracts have a total value of slightly less than NOK 1.3 billion, excl. options.
The scope of work for the riser platform accounts for an estimated 70% of the total scope
committed in both contracts.
These contacts are the last construction contracts in Phase 1 of the Johan Sverdrup
development. The competent supplier team now in place will help us develop a project
for several generations on the Norwegian continental shelf. Norwegian suppliers have
demonstrated competiveness, and have together landed more than 70% of all awarded
Johan Sverdrup contracts, says Margareth vrum, Statoils executive vice president for
Technology, Projects and Drilling.
Aibel has been awarded the contract for hook-up and commissioning of the drilling
platform on the Johan Sverdrup field centre in 2018. The contract includes an option for
hook-up and commissioning of the processing and accommodation platforms in 2019.
Aker Solutions has been awarded the contract for hook-up and commissioning of the
riser platform on the field centre in 2018. The contract includes an option for hook-up and
commissioning of the processing and accommodation platforms in 2019.
Preparations start immediately. Kicking off in the summer of 2018 the hook-up work
offshore represents the final and crucial phase prior to first oil on the Johan Sverdrup field.
In this phase the jackets, platforms, wells, subsea equipment, export pipelines and power
from shore will be hooked up to form a fully functioning field centre that will come on
stream in late 2019.

6 | Oilfield Technology February 2017

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 World news February 2017

Red Wing Shoe Company to extend global reach Shell to sell North Sea
The regression of global oil and gas production over the past two years has been difficult for
assets for US$3.8 billion
the industry with the impact being felt not just by producers, but the secondary market too. Shell has agreed to sell a package of UK
As a result, many O&G businesses are stricken by significantly reduced crude oil production North Sea assets to Chrysaor for a total of
and, in some cases, the abandonment of certain key service and supply partners important to up to US$3.8 billion, including an initial
employee safety and productivity. consideration of US$3.0 billion and a
Many personal protective equipment providers have either scaled back or entirely pulled payment of up to US$600 million between
out of the market this past year, said Paul Olson, managing director of the Middle East, Asia, 2018 - 2021 subject to commodity price,
Africa, Russia & CIS for Red Wing Shoe Company. IOCs, NOCs and Service companies are with potential further payments of up to
understandably anxious of their PPE supply chain. There are signs HSE and Procurement US$180 million for future discoveries.
officials can specifically look for. The package of assets consists of
Among those he cites are delayed shipments of a week or more, lack of in-country Shells interests in Buzzard, Beryl, Bressay,
presence, inept Customer Experience professionals not indigenous and familiar with the Elgin-Franklin, J-Block, the Greater Armada
nuances. Olson said that, in general, the committed providers are the ones able to alleviate cluster, Everest, Lomond and Erskine, plus
rather than add work to O&G entities. Red Wing, for example, supplies companies in-country a 10% stake in Schiehallion.
via local distribution hubs that offer a full service platform. Such items as: Identifying the The decommissioning costs associated
correct PPE for the work scope, tracking and reporting individual consumption, product life, with the package are currently expected to
replacement timelines, quantities, consolidating invoicing, product care and much more. If a be US$3.9 billion, of which Shell will retain
PPE provider does not offer this or is not investing in a full-service infrastructure, the IOC/NOC a fixed liability of US$1 billion and Chrysaor
and service companies will spend more valuable time administering PPE contracts than on a will assume the remaining liability.
focused approach to their core business. The deal is subject to partner and
Despite the past years trend, I can say with certainty Red Wing is committed to the regulatory approvals, with completion
sector with its partners through thick and thin, adds Olson. Were built on a legacy of work expected in the second half of 2017. The
done right, committed to solutions for workers wherever and whenever they operate. transactions effective date is 1 July 2016.

InterOil: Antelope-7 side Statoil completes sale of Subsea inspection service

track drilling update
On December 22, InterOil announced that
the initial Antelope-7 well had reached
2127 m (6978 ft) measured depth below
rotary table. After encountering drilling
difficulties in the Orubadi Formation,
Total E&P PNG, the operator of Petroleum
Retention License 15 in the Gulf Province
of Papua New Guinea commenced the
Antelope-7 side track appraisal well.
On January 31, 2017, according
to information provided by Total, the
Antelope-7 side track appraisal well
reached 1980 m MDRT and is drilling
ahead in the Orubadi Formation. The well
is designed to provide structural control
and reservoir definition on the fields
western flank. It has a proposed total
depth of ~2300 m MDRT and is located
roughly 1.45 km west-south-west of
Antelope-5.
InterOil holds a 36.5375% interest
in the well. Total E&P PNG Limited has
a 40.1275% interest, Oil Search has
22.8350%, minority parties hold the rest.
oilsands business
Statoil and Athabasca Oil Corporation have
completed the transaction whereby Statoil
has sold its entire oil sands operations
in the Canadian province of Alberta to
Athabasca.
The divestment includes the producing
Leismer demonstration plant and the
undeveloped Corner project, along with a
number of midstream contracts associated
with Leismers production. Statoil
has received CAN$431 million in cash
(following customary closing adjustments)
plus 100 million common shares in
Athabasca, representing just below 20% of
the equity in the company.
Up to a further CAN$250 million of
contingent payments will be paid out
over the next four years, depending on
production levels and the prevailing oil
price.
Last year, Athabasca sold a stake
in shale assets to Murphy Oil Corp. for
CAN$475 million to help fund development
of properties in Western Canada.
launched by Lloyds Register
Lloyds Register has launched its Subsea
Inspection Services to support underwater
inspections of subsea pipelines, assets and
facilities to energy companies operating
offshore.
Services include project management,
consultancy, personnel, quality control,
data processing and data management,
applicable to ROV, AUV and diver projects.
The services are headed by LRs Subsea
Inspection Manager Andrew Inglis, and
delivered by the companys in-house
experts in subsea inspection, survey and
asset integrity.
Inglis says: LR has significant
capability and experience within the
subsea sector including management
of a wide range of offshore projects and
operations across the energy mix. By
uniting this expertise and experience
with our focus upon safety, quality and
cost-efficiency, we aim to be the preferred
subsea inspection management supplier
for our clients.

8 | Oilfield Technology February 2017

 IT ALL STARTS
ONSHORE. OFFSHORE. EVERY SHORE.

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10 |
MICHELLE GOMEZ,
DOUGLAS-WESTWOOD, PROVIDES AN
OVERVIEW OF THE UPSTREAM INDUSTRYS
PROSPECTS IN ASIA.

T
he effects of the oil price collapse have been widely
published with headlines in the upstream sector often
containing themes of Capex cuts, postponements
and cancellations, lower oil prices for longer, seemingly a daily
ritual. Yet amidst the unwelcome news over the past one and
a half years, comes a long awaited 1.2 million bpd supply cut
committed to by OPEC an agreement which was reached on the
30 November 2016 following several futile meetings by the cartel.
While this early Christmas gift presents significant hope for the
wider oil and gas sector, the industry continues to go through an
extremely rough period. Douglas-Westwood estimates upstream
Capex declines of 35 and 14% in 2015 and 2016, respectively.

| 11
 As with the rest of the world, Asia has not been spared from the
realities of the oil and gas downturn. The region has seen divestments in
Asian E&P assets from the likes of Chevron and Murphy Oil. The services
sector has also been impacted and has witnessed the liquidation
of leading provider Swiber and Swissco fall in the red. Additionally,
headcounts have been reduced by some of the bigger industry names
such as Petronas and Keppel Shipyard amongst others. Exacerbating the
state of the industry are Capex cuts by end users Petronas and CNOOC
who have announced RM15 billion (US$3.4 billion) and RMB10 - 20 billion
(US$1.4 - 2.9 billion) cuts respectively, inevitably having a knock on
effect to the rest of the supply chain service providers and equipment
manufacturers. However, while dark clouds loom, the industry should
not lose sight of a number of opportunities.
Accounting for 42% (BPs Statistical Review) of energy demand,
Asia-Pacific (APAC) will continue to be the backbone of global
requirements. From a macro-economic perspective, the regions
long-term demand fundamentals remain robust. China and India, the
regions economic powerhouses, collectively account for 37% of the
global population and 28% of world energy consumption. Present
GDP growth rates are estimated at 6.9% and 7.6% and are expected to
remain positive in the foreseeable future. Continued positive growth
rates for key leading indicators (GDP and population growth) will drive
energy requirements, with BP expecting associated energy demand for
both China and India to reach nearly 5893 mtoe by 2035, a 61% increase
compared with the 2015 figure and an estimated 34% share of global
requirements. Looking at the region as a whole, APACs oil and gas
demand is estimated to grow by 37% and 73% respectively.
On a supply front, Asias hydrocarbon production accounted for
approximately 10% of global output in 2016 and is expected to increase
from the current 15.9 million boe/d to 17.3 million boe/d by 2022 (6%
growth), with gas accounting for all of this growth. Notably, recent
years have seen traditional hydrocarbon producers such as Malaysia,
Indonesia and Brunei challenged by oil production decline from mature
fields. Longer term, however, the regions investments in offshore,
unconventional as well as deeper water plays are expected to offset the
decline, particularly in natural gas.
Over the next four years, more US$150 billion is expected to be spent
on offshore developments in APAC, contributing 38% of global offshore
expenditure. With activity expected to pick up as commodity prices gain
momentum, the following themes will characterise Asias upstream
development in the coming years:
NOCs have been and will continue to be key investors
in upstream E&P field development programmes
Over the next five years, 62% of fixed platforms, and 32% of
subsea tree installations in Asia will be accounted for by NOCs, the
majority of which will be rolled out by CNOOC, ONGC, Pertamina,
Petronas and PTTEP. Associated with NOC dominant countries are
protectionist measures and local content policies, which favour
local businesses/partners as well as vessel owners. This is unlikely
to change in the mid to long-term, unless an undersupplied market
surfaces. Markets such as Myanmar, which have less protectionist
measures in play, will in turn see significantly more IOC involvement.
Gas will take centre stage
Whilst oil production is set to decline in all of the key Asian producers
over the next six years, gas output will see significant gains. The majority
of this gain will come from shallow water gas plays across the region as
E&P companies take advantage of gas- and LNG-hungry local economies.
Additionally, the five-fold increase in Chinas recoverable shale gas
reserves, lifting of sanctions in gas-rich Myanmar and the development of
Indias untapped gas market (whose development has been impeded by
12 | Oilfield Technology February 2017
economic viability and transmission infrastructure) supports anticipated
growth in gas output. Chinas three NOCs currently have shale gas projects
operational and starting to produce notable volumes, though none are
at a stage of full commerciality. Gas consumption in APAC is anticipated
to grow by 73% by 2035, with LNG being a key enabler in facilitating
distribution. The shutdown of Japans nuclear reactors following the
Japanese Fukushima accident in 2011 saw associated LNG requirements
skyrocket. Japan is currently the largest buyer of LNG, accounting for
34% of global demand. The next largest buyer, South Korea, accounts
for 13% of global LNG demand. While the two North Asian countries
collectively import nearly half of the global total, associated requirements
are expected to weaken as both countries look to substitute to alternative
energy sources such as coal and nuclear particularly in the case of Japan
as it looks to restart nuclear reactors shut-down in 2011. Despite this, an
anticipated growth in regasification import capacity (and consequently
an increase in LNG demand) in China and India are likely to cushion the fall.
Interestingly, on a country level, national strategies have evolved
to capitalise on the burgeoning gas market in the region. Singapore,
whilst not endowed with hydrocarbons, is positioning itself as a natural
gas hub, tapping into its favourable geographic position of being in the
centre of East Asian LNG-hungry nations and large LNG export centres
in the Middle East, South East Asia and Australasia. Presently with a
storage capacity of 800 000 m3, Singapore is looking to venture into LNG
bunkering as well as nitrogen blending of regasified LNG.
Whilst traditional Asian producers will remain,
Myanmar has grabbed the headlines
Traditionally dominant producers in Asia such as China, Indonesia and
Malaysia are facing challenges in maintaining hydrocarbon output.
Acknowledging its plight, Malaysia has an economic transformation
programme (ETP) in place to revive its oil and gas sector through marginal
field development, rejuvenation of fields through enhanced oil recovery
(EOR) amongst other E&P and supply chain directed initiatives. Indonesia
has seen long-term production decline until recent production additions
from Banyu Urip in 2016. However, it will take more discoveries and
developments to delay further production decline given the maturity of its
fields. Myanmar, however, is attracting the limelight even in a depressed
macro-economic environment. Notably, the country has in recent
years attracted the attention of international players such as Shell and
Woodside. The latter made two significant deepwater gas discoveries this
year, one big enough to justify a fast-track to production within three years.
Growing competition amongst Asian nations
expected
Increasingly apparent is the intensifying competition amongst countries
for resources and business opportunities. The ongoing South China Sea
territorial dispute amongst Brunei, China, Malaysia, Philippines, Taiwan,
and Vietnam for the Paracel and Spratly island groups, has led to
underlying political tension. The shifting of shipbuilding and subsea hubs
away from Singapore in favour of more cost competitive centres such as
China (for ship and rig building) and Malaysia (subsea clustering) creates
immediate rivalry amongst nations trying to compete for the same
volume of work.
The industry must continue to trim the corporate fat, align
business segments to best capitalise on the move to gas, deepwater and
unconventional production and simultaneously look to gain traction
in new or expanding Asian markets, whilst taking into consideration
potential protectionist measures. Where cost is no longer a differentiator
or an advantage, businesses/national strategies should be centred
on developing a niche or rather a unique selling proposition. Exciting
opportunities lie ahead but until this hurdle is overcome, market forces will
be ruthless in eliminating the uncompetitive.
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