Archives for posts with tag: offshore industry

North West Europe is a key offshore area, accounting for 3.2m bpd of offshore oil production (12% of the global total) and 17.8bn cfd of offshore gas (14%). Whilst 10% of the active jack-up fleet and 23% of the active floating MDU fleet are deployed off North West Europe, these are harsh environment units. The region is also home to c.400 OSVs, or 11% of the fleet, but hosts 30% of all PSVs >4,000 dwt.

For the full version of this article, please go to Offshore Intelligence Network.

 

The offshore markets have faced some tough times since 2014, with low utilisation and rates causing difficulties for most companies involved in the sector. As SIW has reported, 2019 has seen several offshore markets start to turn the corner. However, offshore is a complex business, with lots of separate niche sectors which have shown varying levels of improvement. So, let’s have a look at the detail.

 

For the full version of this article, please go to Shipping Intelligence Network.

Drilling wells offshore always has an element of risk attached, and comes with significant upfront cost. Yet only a few appraisal campaigns end in ‘mega-finds’, and not all wells drilled indicate volumes of oil or gas worthy of stand-alone development. Whilst many such fields were side-lined as ‘non-commercial’ in the boom, since the downturn there has been an increasing push to develop more marginal satellites.

For the full version of this article, please go to Offshore Intelligence Network.

Offshore is quite a project driven sector in the sense that work at offshore fields drives much of the demand for offshore vessels. But offshore is also project driven in the sense that offshore output growth is linked to field project start-ups. And since 28% of global oil production is offshore, the aggregate of individual offshore start-ups can potentially have significant implications for wider energy market trends…

For the full version of this article, please go to Offshore Intelligence Network.

With the industry hoping for better “grades” after the “effort” of recent years, this week’s Analysis updates our half year shipping report showing a ClarkSea Index up 9% y-o-y but still below trend since the financial crisis (see Graph of the Week). After comments of “must do better” and “showing potential” in recent years, do the statistics suggest “extra classes” will again be needed over the summer holidays?

For the full version of this article, please go to Shipping Intelligence Network.

Since the 2H 2014 offshore downturn, when investment in new exploration and development dried up, many offshore vessel owners will have tended to agree with the child heroine of the 1976 musical Annie: “It’s a hard knock life”. However after three years of setbacks and weak markets, some are now starting to see positives, as a few indicators show encouraging signs. But does that mean it’s time to invest?

For the full version of this article, please go to Shipping Intelligence Network.

Vietnam has the third largest proven oil reserves in the Asia Pacific region – but much of its existing offshore production is from declining shallow water fields. So the country’s first deepwater discovery, made in October, is a potentially exciting development. Could deepwater E&P activity in Vietnam be set to take off, or will weak oil prices and disputes over territorial waters prove problematic?

Shallow Beginnings

Most of Vietnam’s 0.28m bpd of offshore oil and 0.99bn cfd of offshore gas production is derived from fields in the Nam Con Son and Cuu Long basins, all of which are in less than 200m of water. The Cuu Long basin is perhaps the most successful area off Vietnam as it is home to many large fields, including Bach Ho, Su Tu Vang and Rang Dong. The dominance of shallow fields has skewed development towards fixed platforms. 88% of all active Vietnamese fields are exploited as such. Of these fields, the Bach Ho field accounts for 34 cor 37% of the total found on active fields.

Operators in Vietnam mainly consist of local and regional NOCs as well as IOCs (most commonly via joint operating companies in partnership with Petrovietnam). While significant market reforms have increased foreign investment in Vietnam’s offshore sector, further improvements to its transaction and tax systems could quicken the pace of foreign participation in the future.

Wading Into Deeper Waters

No significant shallow discoveries have been made recently, meaning that there is little to offset Vietnam’s depleting shallow water reserves. This highlights the need to break into deepwater frontiers, which could hold substantial levels of undiscovered hydrocarbons. The VGP-131-TB well, Vietnam’s first discovery in water depths >500m, was drilled in October 2015 by the Vietgazprom JOC, at depths of 1,600m in the Saigon basin. The ultra-deep find could provide momentum for Vietnam’s push into deepwater exploration. However, unlike China, which is able to independently bring deepwater fields like the Lingshui 17-2 online, Vietnam could still need to rely on foreign cooperation to jointly develop such finds in the short term.

Shaky Prospects

Vietnam’s hydrocarbon resources mainly lie in the South China Sea, with the most recent discovery at the southern end. The sea is an area of multiple disputed territorial claims by many countries, including China. This could impede any deep developments, if international partners were to view overlapping sovereignty claims to be an excessive business risk. Perhaps more importantly though, the post-downturn attitude of IOCs is one of cost-consciousness given lacklustre economic conditions. This could skew near-term interest towards safer EOR projects instead of unproven deeper water development in the South China Sea.

Since Vietnam’s historical track record is in shallow waters, even if further deepwater discoveries are forthcoming, then the chance of rapid deepwater developments in the South China Sea is probably going to take time. It is likely to need outside expertise, and the current energy markets may well not be conducive to this. That said, the discovery of Vietnam’s first deepwater field marks a new chapter in the country’s oil and gas story.

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