EIC Newsbrief – Scotland Feb 2013

Home , Dana Petroleum, Expro, North Sea oil, Teesside Wind Farm

Please note Irish news is included in this region for EIC purposes

Oil & Gas (inc Subsea)

BP's Field of the Future - moving to phase three BP's Field of the Future project is now moving into its third phase, getting all of the solutions implemented and integrated across the entire company, said Steve Roberts, VP of Field of the Future at BP, speaking at the Integrated Operations conference in Trondheim on September 25-26. BP considers that the Field of the Future program has achieved additional production of 75,000 barrels per day of oil through the systems implemented so far, with a longer term target of 100,000 bopd. The technology has been implemented on 80 per cent of what BP considered to be its highest value wells. The systems deliver value in four ways. Managing operational risk, improving plant uptime, helping optimising production and allow more efficient workflows, which means that more can be done with less people. http://www.digitalenergyjournal.com/n/BPs_Field_of_the_Future_moving_to_phase_three/92d96552.aspx#ixzz2KIvenHRm

ITF: biggest subsea challenges are subsea processing and monitoring. ITF, the global technology facilitator for the oil and gas industry, has identified its key technology challenges for 2013 and is urging the industry to work together to solve the most pertinent issues. Following comprehensive feedback from ITF's members, challenges affecting production and subsea include annulus management, effective subsea processing, cost effective subsea monitoring, increasing reliability of electric submersible pumps and affordable sour developments. Issues affecting particular global regions have also been highlighted, namely produced water management in the Gulf Cooperation Council (GCC) and forecasting tropical cyclones and hydrodynamic modelling for oil spill response in Western Australia. ITF is also highlighting issues affecting downhole pressure and temperature monitoring in wells. http://www.digitalenergyjournal.com/n/ITF_biggest_subsea_challenges_are_subsea_processing_and_monitoring/e284b958.aspx#ixzz2 KIx60Dx4

New contracts and senior appointments for ROVOP in 2013. ROVOP has made a strong start to 2013 after expanding its management team and signing £3.5 million of contracts in January. The company, which provides subsea remotely operated vehicle (ROV) services, has bolstered its management team with the appointment of Moray Melhuish as commercial director, and strengthened its onshore resource by welcoming Mike Duffus as project manager. ROVOP is taking delivery this week of one of its new work class ROVs. The 150hp Schilling HD can operate at depths of up to 3000metres and will be displayed at the Subsea 2013 conference before immediate deployment on-board a customer's specialised flexible lay vessel. http://www.digitalenergyjournal.com/n/New_contracts_and_senior_appointments_for_ROVOP_in_2013/b59fbdba.aspx#ixzz2KIxTUeNF

Innovations and achievements awarded in Subsea 2013 A host of successes within the subsea sector were celebrated last night at Subsea UK's seventh annual awards ceremony, which aims to recognise innovation and outstanding achievements across the UK subsea industry. EPC Offshore was awarded the evening's top honour, Subsea Company of the Year, sponsored by Brewin Dolphin. The Aberdeen-based company has experienced rapid growth since it was established in 2009, executing in excess of £20million worth of project management work in the past year alone, including landing a significant contract to select the optimum concept for the development of Hurricane's Lancaster Field, one of the most significant oil discoveries in the West of Shetland in recent years. http://www.digitalenergyjournal.com/n/Innovations_and_achievements_awarded_in_Subsea_2013/d409521b.aspx#ixzz2KIyADBJB

New Name in Subsea Unveiled A new subsea oil and gas group, Harkand, chaired by oil and gas industry veteran Tom Ehret, is launching today with an ambition to grow to a turnover of $1 billion in the next five years. Following investment by Oaktree Capital Management in Iremis, Integrated Subsea Services (ISS) and their sister company Andrews Survey last year, the three names have merged to form one group focused on the fast-growing subsea inspection, repair and maintenance (IRM) market. Harkand aims to become a leading global name in subsea IRM focused on attaining the

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EIC Newsbrief – Scotland Feb 2013

highest standards in health, safety, quality and environmental performance and delivering excellent execution of projects.

EnQuest’s £169 million GBP programme of investment for Thistle to deliver threefold increase in production EnQuest PLC, the largest independent UK oil producer in the North Sea, has secured a brownfield tax allowance to fully exploit its Thistle oilfield. The next phase in the life extension programme for Thistle, made possible by today’s announcement, will safeguard almost 500 existing North Sea jobs and create almost 1,000 new jobs across the UK oil and gas supply chain in Aberdeen, Newcastle, Manchester and Swansea over the next three years. EnQuest is among the first oil and gas operators to secure a brownfield tax allowance which is one of a series of measures the Government has put in place to stimulate investment in the North Sea.

Decommissioning Body Shortlisted for Industry Collaboration award Decom North Sea (DNS), the offshore oil & gas decommissioning forum, has been shortlisted for a prestigious Offshore Achievement Award for its work with industry to improve decommissioning processes in the future. During much of 2012, DNS worked in collaboration with operators, contractors, consultants and regulators to formulate a standard template that will allow future decommissioning programmes to be prepared and assessed in a more consistent fashion.

ITF Scores A Hat-trick of New Members ITF, the global technology facilitator, has signed three new members to its international group of oil and gas operators and service companies, who will work together to drive forward innovation and collaboration in the industry. CNR International (CNR), the International division of Canadian Natural Resources Limited (Canadian Natural), one of the world’s largest independent crude oil and natural gas producers, will join international service companies, Expro and FMC Technologies to the organisation’s growing list of prominent industry players.

Fabricom Offshore Services marks one million man hour milestone without incident Fast-growing facilities engineering company, Fabricom Offshore Services, has marked a major safety milestone after recording one million man hours worked without a single reportable incident or Lost Time Incident (LTI). The achievement spans Fabricom’s five-year history as well as work carried out onshore and offshore across the UK Continental Shelf and Norway. Since Fabricom was established in 2007, the company has also grown from around 10 employees to more than 320. Fabricom, which has offices in Aberdeen, Newcastle and Teesside, is rapidly emerging as a leading provider of brownfield engineering, procurement, construction and project management services to the offshore oil and gas industry through consistent and robust delivery of a range of technical services and solutions through the life-cycle of assets.

Global growth underpins Senergy’s strong performance for 2012 Increasing global demand for Senergy's specialist energy services has resulted in strong growth figures for 2012, as well as bolstering its international footprint. The company, which provides fully-integrated project and asset development services across the energy industry, reported that international business accounted for 55% of total revenue – up from 50% in 2011. Through expanding its global reach and client base over the past 12 months, Senergy worked on 1,460 projects across 84 countries, compared with 1,185 projects in 2011 across 78 countries. New offices launched during the year in Aberdeen, Edinburgh, Houston, Dubai and Bath reinforced Senergy’s growth. The company was also recently ranked in the Sunday Times 2012 HSBC International Track 200 league table as well as that of its 2011 Virgin Fast Track 100 of Britain’s fastest-growing privately owned companies.

Proserv seals double North Sea contract wins Rapidly-evolving energy production technology services company Proserv has secured two major contract wins worth in excess of £15 million for work in the North Sea, further strengthening the company’s market-leading position in the subsea controls and communications field. The first deal is with TAQA for the control of subsea wells approximately 16.5km from the Tern platform in the Cladhan field. The second contract award is with another leading operator and also involves work to control the subsea wells.

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EIC Newsbrief – Scotland Feb 2013

PD&MS wins BP contract OIL and gas engineering consultancy PD&MS Energy has bagged a three-year contract with BP that is understood to be worth tens of millions of pounds. The Aberdeen-based firm will today unveil a deal to deliver engineering, procurement and offshore construction services for upgrades on all BP’s drilling platforms in the North Sea. PD&MS, which was taken over by the Middlesburgh-based Wilton Group in 2008 and now employs 200 staff, is already upgrading the oil giant’s Ula rig in Norwegian waters. Simon Rio, managing director at PD&MS, said: “This signifies a milestone in the development of the company and puts us at the top end of our market.” Previous work carried out by the firm includes fitting out the Rowan Norway rig to drill Xcite Energy’s Bentley field in the North Sea. http://www.scotsman.com/business/management/pd-ms-wins-bp-contract-1-2799692

Fairfield enjoys success with three North Sea wells North Sea explorer Fairfield Energy yesterday announced the successful conclusion of a three-well drilling campaign – two exploration and one appraisal – in the Darwin area. The group said that the Ocean Nomad rig drilled two exploration wells within Block 211/27e. It added that the rig remained on location, having discovered oil in one of the wells there. Meanwhile, the John Shaw rig drilled an appraisal well, and has left the location having discovered oil. The area for the three wells lies about 80 miles north-east of Shetland. The firm, which has its operational offices in Aberdeen, holds a 50 per cent interest in both blocks, following a 50 per cent farm-out to Abu Dhabi’s Taqa Bratani in 2012. http://www.scotsman.com/business/energy-and-utilities/fairfield-enjoys-success-with-three-north-sea-wells-1-2796598

£3.25m invested in LUX Assure, a corrosion management company for the oil and gas industry Technology business LUX Assure has received £3.25m to transform the company from a technology development business to a service provider for the oil and gas industry. The investment comes from ConocoPhillips; Statoil Technology Invest AS; Archangel Informal Investment (Archangels); and the Scottish Investment Bank (SIB), a division of Scottish Enterprise. LUX Assure’s CoMic™ and OMMICA™ products will form the core of the company post investment. CoMic™ is used to deliver improved corrosion management. Corrosion costs oil companies many millions of dollars each year and CoMic™ enables optimisation of chemicals used for corrosion protection. OMMICA™ offers a simple method to monitor hydrate inhibitors. http://www.pandjenergy.co.uk/2013/02/roy-macgregor-bright-future-for graduates/?utm_source=rss&utm_medium=rss&utm_campaign=roy-macgregor-bright-future-for- graduates&utm_source=P%26J+Energy+Website&utm_campaign=dad3433da8-RSS_EMAIL_CAMPAIGN&utm_medium=email

Cetix Ltd expanding into new markets Carl Tyler has been brought on board as a new Business Development Manager to assist with this and raise Cetix Ltd’s profile in new markets. Carl is based in North East England and brings with him over 12 years of electrical engineering experience. This is an exciting time for Cetix and they look forward to working with their new customers. Cetix Ltd is acknowledged as one of the top Independent Industrial Control Systems Integrators with over 2 decades of specialist experience and with offices in Rotherham & Aberdeen. www.cetix-group.com

Well abandonment is coming this way....like it or not! Make sure you are well-informed. This biennial Seminar is becoming the forum of note for European well abandonment professionals. It will be of value to all those who are planning for abandonment - at all stages from development onwards. The seminar is a full day of technical presentations, featuring operator and service company case studies and legislative updates from

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EIC Newsbrief – Scotland Feb 2013

both sides of the North Sea. It will be accompanied by an exhibition of the latest services, tools and technologies for well abandonment. http://www.spe-uk.org/Default.aspx.LocID-0a4008003.EmID-965.Lang-EN.EventID-13661.Details-Yes.htm

Dana Petroleum has kicked off drilling at an exploration well in the UK part of the North Sea. The independent has started operations at the Magnolia prospect on Block 13/23a with Diamond Offshores rig Ocean Nomad. Drilling is set to take approximately 26 days to a total true vertical depth of 4920 feet. Junior partner Tap Oil, which holds a 10% share in production licence 1610, said the primarily objective is the Lower Cretaceous interval with targets in the Captain, Coracle and punt sandstones. Dana is operator of the licence on 45% with Summit Petroleum on 25% and Atlantic Petroleum on 20%. http://www.upstreamonline.com/live/article1318110.ece

North Sea oil investment at 30-year high, industry says Companies looking for offshore energy invested £11.4bn in 2012, said Oil and Gas UK, which comprises more than 320 companies active in the area. That will rise to £13bn this year, it predicted. It credited the recent introduction of tax relief to encourage investment in "difficult projects". The number of projects submitted to the Department of Energy and Climate Change and given development approval almost doubled between 2011 and 2012. Thirty-three have been approved since January 2012. But the body warned that the reserves that are now moving through into production have not been fully replaced with new discoveries. Production in the UK fell to the equivalent of 1.55 million barrels of oil per day in 2012, down by 14% from 2011 and by 30% from 2010. According to the Scottish government, there are still 24 billion barrels of oil still to be recovered in the North Sea with a wholesale value of £1.5 trillion. http://www.bbc.co.uk/news/business-21564947

Shell Reassesses Development Plan for North Sea Fram Field Royal Dutch Shell PLC is reassessing its development plan for the Fram oil and gas field in the North Sea following "unexpected" initial drilling results. Shell had planned to produce an average of 35,000 barrels of oil equivalent a day from the field, with first production targeted within the next three years. Shell and its partner in the joint venture Esso Exploration & Production UK Ltd., a unit of Exxon Mobil Corp., XOM is continuing to evaluate the potential of the Fram reservoirs, with a view to producing an alternative development plan for the field, Shell said. Shell has already canceled an order with SBM NV for a floating production storage and offloading vessel, or FPSO, that was to be used in the Fram project. The Fram field is located 220 kilometers (137 miles) east of Aberdeen and 50 kilometers west of the median line between the U.K. and Norway in a water depth of about 100 meters (109 yards). http://online.wsj.com/article/SB10001424127887323549204578319891443947624.html?mod=googlenews_wsj

Skills gap fuels fears for North Sea safety An oil company boss has warned that a shortage of experienced staff is jeopardising the North Sea’s world-leading safety standards as the sector prepares for its biggest boom for 30 years. Geoff Holmes said the industry needed seasoned managers who would be able to respond to a disaster on the scale of the Macondo blowout in the Gulf of Mexico in 2010 or the Piper Alpha tragedy. The Talisman Sinopec Energy UK chief executive spoke out on the day after it was revealed that offshore firms plan to invest £100billion in projects in UK waters – and BP went on trial in New Orleans over the worst offshore oil spill in American history. http://www.pressandjournal.co.uk/Article.aspx/3140319

Senergy Development Solutions (SDS) exceeds business growth expectations A growing portfolio of projects looks set to enable Senergy Development Solutions (SDS) to surpass its mid-2013 turnover target of £4million and grow its team. The business, which is a subsidiary of leading global energy services company Senergy, is set to increase its UK infrastructure by appointing people in Edinburgh and London to support its significant expansion. SDS currently employs 37 people and is on course to expand its team to 40 by the end of this financial year – a doubling of staff over the past six months. SDS credits the growth to increasing demand for its services in oil and gas facilities engineering and total project delivery. This has been developed through a full integration of the service with other established Senergy business lines in subsurface and wells. The growth

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EIC Newsbrief – Scotland Feb 2013

experienced by Aberdeen-headquartered SDS has been across all disciplines in the business while the company has built on its wide portfolio of clients and projects in the North Sea, South East Asia, West Africa and the Middle East.

Economy Scotland's Macroeconomic framework A Group of internationally renowned economists have presented to Scottish Ministers their first set of recommendations and proposals to deliver a framework for economic stability and sustainability in an independent Scotland. The Fiscal Commission Working Group was established in March 2012 to provide impartial technical advice on the economic choices, challenges and opportunities for Scotland post-independence. It is chaired by Crawford Beveridge CBE and includes Professors Andrew Hughes Hallett, Sir Jim Mirrlees, Frances Ruane and Joseph Stiglitz. The first report sets out a detailed range of comprehensive and considered proposals for currency arrangements, financial stability and fiscal policy.

Industry experts work for young people Sir Ian Wood and experts with business, further education, schools and trade union backgrounds will join forces with the Scottish Government to improve the readiness of young people for work. A new Commission for Developing Scotland’s Young Workforce, led by the former Chair of world leading oil services company, The Wood Group, will look closely at the links between Curriculum for Excellence, Post 16 education and employers. The Commission’s members, including Sir Willie Haughey, Grahame Smith from the STUC, Michael Davis from the UK Commission for Employment and Skills and Linda McKay from Forth Valley College, have both employed and inspired tens of thousands of young people. They will look at routes into work after school and the success of programmes such as modern apprenticeships before making recommendations to enhance the current reform programmes next year. http://www.scotland.gov.uk/News/Releases/2013/01/commission-young-workforce210113

Fracking 'could benefit Scottish energy sector’ Aberdeen’s oilfield service companies could benefit from a massive expansion in the shale oil sector, according to accountant PricewaterhouseCoopers, but critics of the industry say the opportunity is overstated and the focus should be on the potential for green energy. The shale gas and oil industry has expanded rapidly in the US, although controversy remains over fracking – releasing hydrocarbons by pumping water, chemicals and sand at high pressure to fracture the shale rock. A PwC report published today predicts that, as production spreads, global shale oil output could reach 14 million barrels per day by 2035, or 12% of the world supply. The Scottish oil industry could benefit if shale deposits in central and southern Scotland are exploited and by lending expertise overseas. The UK economy could also be boosted by an energy price fall. http://www.heraldscotland.com/business/markets-economy/fracking-could-benefit-scottish-energy- sector.20209158?utm_source=headlines&utm_medium=email&utm_campaign=email%2Balert

Renewables / Sustainable / CCS Industry welcomes prime minister's support for green economy and energy efficiency Launching an energy efficiency programme on Monday, Cameron said: "to those who stay we just can't afford to prioritise green energy right now, my view is we can't afford not to". Cameron has been criticised for many quarters for not speaking up sufficiently for the green economy, giving rise to suspicions that he secretly supports those within his party who believe it is a waste of money. But he was unequivocal in his speech. "Make no mistake, we are in a global race and the countries that succeed in that race, the economies in Europe that will prosper are those that are the greenest and the most energy-efficient," he said. The prime minister was congratulated by Arnold Schwarzenegger for his energy efficiency policy, who delivered a message via YouTube http://www.link2portal.com/industry-welcomes-prime-ministers-support-green-economy-and-energy- efficiency?utm_source=http%3a%2f%2ftenalps.communigatormail2.co.uk%2ftenalpslz%2f&utm_medium=email&utm_campaign=EAEM Newsletter070213&utm_term=EAEM+exposes%3a+monopolies+forcing+up+your+energy+bills...&utm_content=768440

Scotland sets long-term vision to cut power sector emissions Scotland has set a target to cut carbon emissions from electricity generation by more than four-fifths by 2030, underlining the huge market for offshore wind beyond 2020. First Minister Alex Salmond revealed the new target at

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EIC Newsbrief – Scotland Feb 2013

the Scottish Renewables-Scottish Enterprise Offshore Wind & Supply Chain Conference, Aberdeen. He also announced the signing of new Memorandums of Understanding (MoUs) between Highland & Islands Enterprise (HIE) and four key ports in the region to support the development of the offshore wind sector. The partnership aims to help the ports attract a potential £100m of investment to the Highlands. http://www.scotland.gov.uk/News/Releases/2013/01/vision-to-cut-power-sector-emissions29012013

New Tidal Energy Report to Help Development of UK Projects A new report has been released by UK based marine energy consulting and engineering firm IT Power Limited, to help new companies assess the UK tidal energy market and understand how to develop a project in UK waters. The UK Tidal Energy Market Entry 2013 Report delivers essential insight into every aspect of the UK tidal energy industry – government policy, economics, environmental impacts, technical developments, supply chain support, resource availability and infrastructure. It also provides analysis and projections on the future growth of the sector in the UK, alongside the views from other industry bodies, helping companies to decipher the project development process and take a decision on when is best to enter the UK market. http://subseaworldnews.com/2013/02/08/new-tidal-energy-report-to-help-development-of-uk- projects/?utm_source=Subsea+World+News.com&utm_campaign=b131ed99ea-RSS_EMAIL_CAMPAIGN&utm_medium=email

Iberdrola backing UK assets with £3.8bn pledge Energy giant Iberdrola has pledged to plough more than 40 per cent of its total investment until 2014 into its UK operations as its ScottishPower business proved a star turn in resilient annual trading results. The Spanish multi- national’s commitment came as ScottishPower Renewables also revealed yesterday that it has won planning permission from the Scottish Government to build a giant 96-turbine windfarm at Kilgallioch, south of Barrhill in south-west Scotland. Iberdrola said €4.4 billion (£3.8bn) would be invested in the UK over the three-year period, the lion’s share of it in ScottishPower, but also other operations including those in the north-west of England and Wales. The company said in its results statement that the UK’s “relatively stable and predictable regulatory environment” was the catalyst for the decision http://www.scotsman.com/business/energy-and-utilities/iberdrola-backing-uk-assets-with-3-8bn-pledge-1-2791951

Scotland’s energy boon continues with £165m investment New figures published by industry body, Scottish Renewables, has revealed for the first time that Scotland’s offshore wind developers have invested around £165m in the Scottish economy so far. Scottish Renewables asked its members developing offshore wind projects in Scottish waters how much they had invested in the sector to date. The results showed that £164.5m of investment has been made with a significant proportion, £65m, being invested in 2012 alone. The investment figure represents all contracts awarded by developers with Scottish companies in advance of any consents being awarded to their projects. 2012 really fired the starting gun for large scale offshore wind development in Scotland with projects representing more than 4GW (Gigawatts) of potential installed capacity, enough to power 3 million homes, entering the planning system.

Utilities Scottish Water names Douglas Millican as new chief executive Scottish Water has appointed Douglas Millican as its chief executive, it announced today. Millican, the finance and regulation director, had been interim chief executive since the sudden death of Richard Ackroyd in autumn last year. "I am honoured and delighted to take the helm at Scottish Water, leading a committed and passionate workforce delivering ever improving services to our customers," Millican said. "The service we provide is an essential one, and I know everyone in Scottish Water will continue to do the very best we can to deliver for our customers and communities across Scotland." The appointment had the unanimous support of the Scottish Water board and has been approved by ministers. http://www.utilityweek.co.uk/news/news_story.asp?id=198082&

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EIC Newsbrief – Scotland Feb 2013

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