IHS ENERGY IHS Petrodata Offshore Field Development Monthly January 2015 | Vol. 6, No. 1 ihs.com 2014 IN REFLECTION Heather Gardner Managing Editor Rebecca Gorring Sophie Howden Contributing Editors Jane Steele Data Analysis David Adams Lisa Smart Desk Editors IHS Energy | Offshore Field Development Monthly Contents 2014 in reflection 3 Market Spotlight – West Africa 5 Discoveries 5 Significant recent discoveries 7 Early Planning and Development Scenarios 7 New Tenders and Awarded Contracts 8 Significant recent requirements 9 Recently awarded significant contracts 10 Construction Vessels 11 Selection of vessels to be delivered in the next six months 12 Sale and Purchase last six months 13 Floating Platforms 14 Under construction FPSOs to be delivered in next 12 months 15 Worldwide Support Vessel Utilisation by Region 15 Calendar of Industry Events 15 IHSTM ENERGY Copyright notice and legal disclaimer © 2015 IHS. 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All products, company names or other marks appearing in this publication are the trademarks and property of IHS or their respective owners. IHS Energy | Offshore Field Development Monthly 2014 in reflection Heather Gardner As 2014 has now drawn to a close, Offshore Field Development Monthly takes time to reflect on the year’s project start-ups to gain perspective on how the industry has sized up compared to 2013 and what the year ahead may bring. As predicted, 2014 turned out to be a rather cautious, dismal year for the offshore industry. Amid rising development costs and the recent fall in oil prices, a handful of project delays were announced as operators sought out ways to cut costs. Year-over-year, worldwide production start-ups declined almost 23%. Despite the decline in the number of new start-ups in 2014, a few of the projects that did come online represented portfolio flagships, including China’s first deepwater development and three major developments in the US Gulf of Mexico. Notable 2014 production starts Project Region Country Development type Month Mars B North America USA, GoM FPS & SS February Liwan Southeast Asia China Fixed & SS March Clov West Africa Angola FPS & SS June Fram H-North Northwest Europe Norway SS September Svalin C (ex-Grane C) Northwest Europe Norway SS September Iracema South America Brazil FPS & SS October Golden Eagle Area Development Northwest Europe United Kingdom Fixed & SS November Sapinhoa South America Brazil FPS & SS November Tubular Bells North America USA, GoM FPS & SS November Jack/St. Malo North America USA, GoM FPS & SS December Panyu Southeast Asia China Fixed & SS December West Hub West Africa Angola FPS & SS December Asia-Pacific and North America brought the majority of new projects online, comprising 36% and 19% respectively of worldwide projects for the year. In March, Husky Energy and CNOOC commenced first production at their massive, deepwater Liwan gas project in the South China Sea. The project consists of the Liwan (LW) 3-1, Liuhua (LH) 34-2 and LH 29-1 fields, which share a subsea production system, subsea pipeline transportation and onshore gas processing infrastructure. Water depths at the development range from 1,200 to 1,500 m (3,936 to 4,920 ft). Discovered in 2006, Liwan represents China’s largest natural offshore gas field and is estimated to contain four to six trillion cubic feet (Tcf) of gas. Since March, the operators have also brought online production at Liuhua (LH) 34-2 gas field, the second field in the Liwan gas project. Over in the US Gulf of Mexico, Shell commenced production at its Mars B field in early February, a whopping six months ahead of schedule. The operator has since been working to increase production at the Mississippi Canyon field, with the goal of reaching its peak production rate of 100,000 barrels of oil equivalent per day (boe/d) by 2016. The field was developed using the Olympus TLP and features 24 well slots. It will ultimately draw production from 8 blocks: Mississippi Canyon Blocks 762, 763, 764, 805, 806, 807, 850 and 851. © 2015 IHS 3 January 2015 IHS Energy | Offshore Field Development Monthly 2014 Project Starts In November, Hess announced that first production had commenced at its 6% Tubular Bells field, also in the 8% Mississippi Canyon area. Tubular Bells, discovered in 2003, was developed via 36% the Williams’ operated Gulfstar spar, 15% GS-1. Following a ramp-up period, the field is expected to have a net production of 25,000 boe/d. And just in December, over 10 years in 19% 5% the making, Chevron kicked off 4% production at its long-awaited Jack/St. 7% Malo project in the Walker Ridge area. St. Malo, discovered in 2003 and Jack, Asia-Pacific Indian Ocean Mediterranean/Black Sea discovered in 2004, were developed Middle East North America Northwest Europe South America West Africa jointly via a subsea production systems Source: IHS © 2015 IHS tying into the Jack/St. Malo semisubmersible unit, with further field expansion and tie-ins anticipated in the future. A peak production of 94,000 boe/d and 21 million cubic feet (MMcf) of gas per day is expected in the coming few years. What will 2015 look like? No doubt 2015’s forecast project start-ups (some 250+) are artificially inflated as developments anticipated to be brought online in 2014 were rolled into 2015. Coupled with the sharp decline in oil prices since September, 2015 can be expected to follow in the footsteps of 2014 and IHS anticipates that projects predicted to come online in 2015 will thin out and trickle into subsequent years. As we have seen in the past, falling oil prices lead to project delays, deferments and even cancellations. Already, the industry has seen the first Global project production starts of what may be more delays to come. Canadian operator Husky announced in 300 December that a Final Investment 250 Decision (FID) for its White Rose Extension project would be delayed a 200 year, while it works to identify cost efficiencies and explore alternative 150 development options. Likewise, operator Rockhopper in the Falkland 100 Islands has deferred project sanction for its Sea Lion project to mid-2016. The 50 Number of projects by type projectsNumber by of operator hopes to adopt a lower-cost development solution. 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Recent history has taught us that economic feasibility for deepwater Fixed FPS Subsea Other projects demand oil prices of between Source: IHS © 2015 IHS USD 80-100 a barrel. Brent crude oil is currently trading under USD 48 a barrel, a low not seen since 2009. Weak global economies and an oversupply of crude are to blame, and it may take some time for demand to overtake supply. © 2015 IHS 4 January 2015 IHS Energy | Offshore Field Development Monthly Market Spotlight – West Africa The momentum of West African field development activity is anticipated to be sustained in 2015, with operators targeting to award major contracts and adding projects to their drawing boards. Forthcoming final investment decisions In Cote d’Ivoire, the FID for Vioco’s Gazelle development is expected to be achieved during the first half of 2015 after having been rescheduled due to challenges with aligning the upstream and midstream phases. Offshore Angola, Cobalt has submitted the field development plan for its Cameia project and is targeting to award the major contracts for the FPSO development during the first quarter of 2015. Vaalco is also anticipated to move forward with the Venus FPSO development located in Block P off Equatorial Guinea with FID anticipated for this year. In Nigeria, FID will likely take place in 2015 for the Addax-operated Ofrima and Udele development as well as for Shell’s Nigerian Bonga Southwest project. In Gabon, Harvest Natural Resources will reach FID for the Ruche development, which is planned as a cluster development with subsea wells tied to an FPSO. Vaalco also targets a 2015 FID for the Ebouri central crude sweetening platform (CCSP) project during the second quarter. As for LNG projects, FID should be reached for the Cameroon FLNG and Ghana FSRU projects respectively during the first half and the second half of 2015. Meanwhile, in Equatorial Guinea, FID for the Block R FLNG project will be expected later in 2016 while front-end engineering and design (FEED) activities will commence in early 2015. Early development planning Field development planning in Ghanaian waters will remain active in 2015. Eni is to submit the plan of development for the Sankofa-Gye-Nyame project, to be developed by means of a mid-sized FPSO. Tullow Oil and Kosmos Energy, the respective operators of the Jubilee field and the Mahogany-Teak-Akasa (MTA) fields, are planning to submit the Greater Jubilee Area full field development plan to the Ghanaian authorities in 2015. In the meantime, Camac Energy will be completing the evaluation of the economic viability of the Shallow Water Tano block holding the Tano North, Tano West and Tano South discoveries to assess a potential development.