From Subsea Expo, Aberdeen: It must be the season of multi-syllabic panaceas as the words heard most often here last week were collaboration, cooperation, innovation, simplification, standardisation, et al.

Lots of nice encouraging words about working together, finding ways to reduce costs, getting new technology into the market, while under the surface there were people quaking in their boots worrying about how exactly the current slowdown will pan out.

Companies could be divided into two groups - those with thick orderbooks who expect to weather 2015, but worry about next year and those who are already thinning out their workforce and cutting back on everything from paperclips to coffee in the canteen.

Operators and contractors alike are looking at every and all possibilities for ways to reduce costs, but the answers, apparently, are right in front of them.

Phil Simons of Subsea 7 spoke about partnership, at least one multi-syllable word that has some meaning. Its DSVi arrangement in which it provides services to six different operators covering 40 fields offers a possible model for companies looking to make savings on opex and maintenance.

From Mark Richardson of Apache who has been stirring the pot on various issues for years comes another - a project team of five.

That is what his company did on Bacchus (SEN, 31/10) and Aviat (31/16), the latter where shallow gas, normally viewed as a hazard, is being exploited as a subsea development to fuel the Forties complex and he wondered why other companies can not do similar. Or why Bacchus could be developed subsea at a cost of $22mn/well slot, a figure much lower than most North Sea operators.

When times are hard, wordage becomes more interesting. Neil McCulloch of EnQuest, another lean medium-sized company, spoke about ‘margin compression’, a neat term for little left in the cupboard.

It would have been impossible for technology to stick its head above the parapet and Chevron’s Peter Blake who now also wears the lofty mantle as chairman of National Subsea Research Initiative (31/6) did so, only to reveal a major shortcoming of research here.

NSRI has joined a crowded room of organisations - ie ITF, OGIC, TLB, OGUK - who are all trying to influence and/or nab funds to back research. Fewer agencies and more focus is what is really required.

Blake asked the question - ‘can NSRI make a difference?’ Its programme of trying to meet industrial needs centred around five subsea technology action groups might find a focus, but it looks like the Technology Leadership Board which is looking at finding new technology to assist in the ‘exploitation of small pools’ might have found the target.

The question remains - is there a need for more technology or really a need for corporate will to deploy what already exists?

Keep calm...

The UK subsea sector is facing tough times ahead over the next couple of years, but it will weather the storm if it embraces innovation and new technology.

‘Don’t panic’ was the message for delegates from Neil Gordon, the chief executive of Subsea UK. He said the operating landscape had been changed dramatically over the past few months and that there is now a need to drive efficiency through innovation and technology.

‘This industry does go through cycles of highs and lows. We have been here before. We don’t have to panic. This is a long term industry based over decades of investment,’ he said.

He said the UK’s subsea sector, which generates annual revenues of US $13.7 billion, came out of a strong 2013 to a relatively flat second half of 2014, which has continued into 2015.

‘The existing order book kept the industry going but as this dries up and projects are abandoned or postponed until the oil price recovers, we are in for major challenges.’

The situation also presents opportunities for the subsea sector, however, and delegates were told ‘not to waste a good crisis.’ Gordon said that there needs to be a cultural change in how projects are approached with more cooperation and collaboration.

The oil price decline is beginning to bite and offshore activity will remain ‘moderate’ in 2015 and 2016 with operations in frontier areas such as the Arctic and East Africa likely to be delayed, according to Infield Systems research analyst Kieran O’Brien.

In the Gulf of Mexico, peak shallow water activity is expected around 2016, while FIDs on deepwater developments will be further delayed. Deepwater activity is expected to recover from 2017-2020.

Global subsea tree orders are expected to fall 30% to 2,227 from 2015-2019, down from Infield’s earlier forecast of 3,142. Spending on subsea trees is likely to pick up in 2018, however, with high levels of ultra-deepwater tree orders expected.

Activity in West Africa will remain robust and deepwater development will be strong in Angola, Ghana and Nigeria. More than a dozen deepwater developments are expected to come onstream in West Africa in the next five years with recoverable reserves of more than 6bnbbls of oil, Fawaz Martini of Petrologica said.

Projects coming

These include, in 2015, Chevron Lianzi (30/4) in the Congo (46,000b/d); Tullow Jubilee phase 2 (31/6) in Ghana (40,000b/d); and ExxonMobil Kizomba (31/17) satellites phase 2 in Angola (125,000b/d); and in 2016 Tullow TEN (31/15) in Ghana (80,000b/d); Total Moho Nord Marine (30/23) in the Congo (140,000b/d); Eni 15/06 East Hub (31/20) in Angola (80,000b/d); and Total Egina (31/20) in Nigeria (200,000b/d).

Following are Total Kaombo (31/16) in Angola (200,000b/d), Eni Etan in Nigeria (85,000b/d) and OCTP (31/22) in Ghana (80,000b/d) are due onstream in 2017. Maersk Chissonga (31/8) in Angola (100,000b/d) is due for start-up in 2018, Eni Zabazaba in Nigeria (40,000b/d) in 2019 and Shell Bonga SW (31/10) in Nigeria (225,000b/d) in 2020.

New boys in town

Sue Whitbread of UKTI said developments in Nigeria would be driven by the appearance of new, energetic, independent oil companies including Seplat, Afren, Oando, Sahara, Frontier, Tenoil, and Energia.

‘These companies might not be familiar to you but you are talking about progressive, enthusiastic, small and very expert independent oil companies which are going to make a huge difference to the way Nigeria runs its industry,’ she said.

They are currently focussing onshore, in swamp regions and in shallow water, but they are also acquiring deepwater assets which will require expertise, hopefully from the UK, to help develop.

‘Some of the technology from the subsea sector could influence the way they handle those portfolios. Now is the time to get amongst all that and see if we can shape some of the decision making,’ the UKTI official encouraged the audience.

Proserv was named ‘subsea company of the year’ at the Subsea UK awards dinner...The team behind DES and the MARS connector - led by Ian McDonald and Tom Bryce - has re-formed under the Enpro Subsea moniker with a new flow access system which does not need direct connection to a xmas tree.

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