Akastor, Mitsui Form JV For Skandi Santos Hull, Topside

Norway’s Akastor ASA oil service investment company signed an agreement with Japan’s Mitsui & Co. Ltd. to acquire the Skandi Santos hull from DOF Subsea Rederi AS and the Skandi Santos topside from AKOFS Offshore AS through a joint venture with 50:50 ownership.

Mitsui & Co. will be working with its Japanese partner.

The JV will subsequently enter into a lease agreement with AKOFS corresponding to the remaining contract duration between AKOFS and Petrobras. DOF Subsea will continue providing ROV and marine services onboard the vessel as part of the subsea equipment support vessel contract with Petrobras.

The agreement is subject to Petrobras’ consent, bank approvals and certain other conditions, which are expected to occur during the fourth quarter of 2016.

Arctic Securities is the financial adviser and BA-HR law firm is the legal adviser.

When the transaction closes, AKOFS will gain US$66 million net of investments in the JV.

The annual bareboat charter and related costs will increase by US$8.5 million per year over the remaining contract period. The contract with Petrobras for the operations in Brazil will remain in a fully owned subsidiary of AKOFS.

Flexlife Group, Deep Water Concession Sign Work Contract

The Flexlife Group (Flexlife) and Deep Water Concession Ltd. of Nigeria have taken their two-year working relationship to the next level by signing an exclusive cooperation agreement to work with each other in Nigeria.

Flexlife provides specialized engineering, design, delivery, integrity and technology in the area of subsea and topside flexible risers and flowlines, while Deep Water Concession provides subsea engineering, pipeline management and construction, well engineering, engineering procurement, PMS and EPC project delivery for the Nigerian oil and gas sector.

The two companies have worked together on several projects on a non-exclusive basis for the past two years, according to a news release.

UK Taps University To Create Subsea Sector Training Framework For India

The U.K. government has awarded Robert Gordon University (RGU) in Scotland funding to set up a training framework, focusing on accelerating skills development in deepwater subsea, for India’s energy sector.

The funding was awarded to RGU following India’s commitment to reduce its energy imports and the country’s intention to fully exploit its field development plans for the deepwater block in the Krishna-Godavari Basin offshore eastern India, a news release said.

RGU will draw on its subsea expertise and experience of working in the North Sea and internationally to appraise the future skills profile of India’s industry and propose a framework that focuses on engineering disciplines and management. As part of the six-month project, RGU will conduct a feasibility study with goals of learning more about the subsea skills gaps in India, identifying opportunities for good practice sharing and providing recommendations, according to the release.

In addition, RGU also received funding to advise the Mexican Government on skills development for its oil and gas sector. The university will give recommendations on how to address the potential skills gap over the next 15 years at the graduate and vocational levels.

Nominations Open For Annual Subsea UK Awards

Nominations are being accepted for the 2017 Subsea UK Awards, which recognizes companies and individuals that are leading Britain’s subsea sector.

Entries are being sought for the best subsea company of the year (large and small), the most promising young person in the sector, the most exciting new enterprise and the individual who has made the most outstanding contribution to the subsea industry. The awards also will recognize achievements and innovations in technology, safety and exports.

Entries can be made online at subseaexpo.com by Nov. 4. An independent judging panel of industry leaders will score each entry according to the agreed criteria and the shortlist of finalists will be announced in January 2017. Accolades will be presented at a gala dinner Feb. 2 during the Subsea Expo.

KKR, Other Lenders Will Control Expro Group

British oilfield services group Expro International Group Ltd. will be controlled by four lenders including KKR & Co. LP and Goldman Sachs Group Inc. as part of a financial restructuring, the U.K.’s Sky News reported.

The lenders, which also include hedge fund Highbridge and Park Square Capital, will exchange their debt for equity, giving them a controlling stake in the company, according to Sky News.

Confirmation of the news could come as soon as the end of the week of Sept. 19, Sky News said, citing sources. Expro was not immediately available to comment.

Specializing in well flow management, Expro provides subsea, completion and intervention; well test and appraisal; and production services.

InterMoor Names Canada Country Manager

InterMoor, an Acteon company, has appointed Joe Price as country manager for InterMoor Canada, the company said in a news release.

Price brings with more than 14 years of offshore oil and gas industry experience.

The Newfoundland native has worked extensively on the engineering, procurement, construction and installation of mobile/permanent mooring systems in the majority of the world’s offshore markets, the company said.

Training Center Improves Diver Safety

JFD, a subsea operations and manufacturing company, has signed a new agreement with Fugro to provide training courses delivered by the National Hyperbaric Centre (NHC), part of JFD Ltd., at the Fugro Academy Training Centre in Abu Dhabi, a company press release stated.

The agreement with Fugro will see JFD-approved local and U.K. trainers delivering the full range of courses that are currently offered by the NHC, including client representative, dive system auditing and assurance, dive technician and kirby morgan helmet technician courses.

The addition of another training facility allows the NHC to expand its global presence and provide training services to a wider audience.

Delegates will have access to Fugro’s two 15- to 20-capacity training rooms, a computer training room and onsite ROV and dive systems to carry the practical modules of courses.

Shell Offers GoM’s Mad Dog, Julia Field Interests

Royal Dutch Shell Plc is selling overriding royalty interest in 17 leases in the Gulf of Mexico (GoM). The assets have an estimated 10-year revenue stream of $450 million, according to EnergyNet, which is handling the transaction for Shell. Areas consist of Ewing Bank, Garden Banks, Green Canyon, Main Pass Area, Mississippi Canyon and Walker Ridge.

Highlights:

  • 17 leases across nine total properties;
    • 13 producing and receiving revenue (Including Mad Dog Field operated by BP Plc);
    • Three recently producing with first check received July (Julia Field operated by Exxon Mobil Corp.);
    • One nonproducing (Sheba Field);
  • Current average historical production is 54,000 bbl/d of oil and 29 Mcf/d;
    • 10-year estimated revenue stream of about $450 million;
  • 15-year estimated revenue stream of about $750 million; »» Estimates are based on Wood Mackenzie’s forecast and are net to Shell’s interest, EnergyNet said;
  • Total 2015 revenue is about $14 million;
  • 12 total payors; and operators include: Anadarko Petroleum Corp.; BP Plc; Exxon Mobil; Deep Gulf Energy Cos.; Eni US Operating Co. Inc.; Enven Energy Ventures LLC; Lobo Operating Inc. (Saratoga Resources Inc.); Marubeni Oil & Gas USA Inc.; and Marathon Oil Corp.

Sealed bids were due Sept. 22.

Indonesia Will End Taxes On Oil, Gas Exploration

Indonesia said on Sept. 22 that it will eliminate taxes on oil and gas exploration this week in an effort to bolster investment in the country’s flagging oil and gas sector.

Wiratmaja Puja, director-general of oil and gas, said the government was aiming to remove all taxes on exploration, including a value-added tax on imported goods and a land tax that had been a deterrent to investment since it was introduced in 2010.

“Global exploration [companies] will return enthusiastically,” Puja told reporters on Sept. 22. “Investment will increase.”

The government has been trying to revive flagging oil and gas production, but investors have been deterred by low global oil prices and regulatory and investment risks in Indonesia.

Indonesia’s crude oil output peaked at about 1.7 million barrels per day (MMbbld) in the mid-1990s. But with few significant oil discoveries in Western Indonesia in the past 10 years, production has fallen to roughly half that as old fields have matured and died.

Acting Energy Minister Luhut Pandjaitan had earlier told reporters the new regulation was due to be announced on Sept. 23, and “will definitely be attractive.”

“There needs to be compensation,” he said, referring to the “high risk” in offshore and deepwater exploration wells that could cost more than $100 million each to drill.

Under the new regulation, the government will provide oil and gas contractors an internal rate of return above 15%, Pandjaitan said.

While the government is scrambling to prevent oil production from falling next year to its lowest level since 1969, it is also under pressure to keep a lid on how much the government is liable for regarding contractors’ recoverable costs. Those are predicted to hit $10.4 billion in 2017, higher than the $8 billion targeted in 2016.

“We are seeking an equilibrium [where] production climbs but costs can be low, so we are talking about efficiency,” Pandjaitan said.

Cost recovery is the amount of money spent on exploration, development and operations that contractors can reclaim from the government after their oil and gas operations start producing.

The government has slashed cost recovery spending with efforts to improve efficiency since 2014, but this could also discourage oil well development and maintenance and constrain its ability to boost output, an official at the industry regulator said in June. Production costs are typically higher from mature wells.

The industry is a vital part of the Indonesian economy, but its contribution to state revenue has dropped from about 25% in 2006 to an expected 3.4% this year, according to data compiled by consulting firm PricewaterhouseCoopers.

“Interest in exploration in Indonesia nosedived in 2013 due to the land and building tax issue and has yet to recover,” the Indonesian Petroleum Association said in its 2015 annual report.

Most of Indonesia’s oil and gas production is carried out by foreign contractors including Chevron Corp., ExxonMobil Corp., BP, Total, and Conoco- Philips, whicj operate under production-sharing contract arrangements.

Indonesia holds proven oil reserves of 3.7 Bbbl and is ranked in the top 20 oil producers globally.

—Staff & Reuters Reports