Kraken Stays On Track For 2017 Startup

EnQuest Plc said the Kraken subsea heavy oil development in the East Shetland Basin is on track, with the FPSO vessel set for sailaway in second-half 2016 and first oil in first-half 2017.

Coping with the downturn, the company already has cut costs for the U.K. North Sea project being developed with Cairn Energy. Better performance on drilling and subsea production systems helped to push the capex estimate down another $100 million to about $2.5 billion.

“The Kraken FPSO [unit] is very close to mechanical completion, with the focus now on precommissioning and commissioning activities. All four engines and boilers are mechanically complete,” EnQuest said in a statement. “The latest reductions in the overall full-cycle gross capex estimates for Kraken reduce EnQuest’s 2016 net cash [capex] by a further $50 million, now down to between $620 million and $670 million.”

Jock Lennox, chairman of EnQuest, also credited the company’s recently announced restructuring deal to helping deliver the development on time.

The deal is expected to bring in $410 million of extra cash mainly for the Kraken development.

The company said it would issue 300 million new shares at 23 pence per share and that lenders had agreed to relax some debt repayment terms.

EnQuest agreed with bondholders to only pay bond interest in cash when oil prices are above $65/bbl for a six-month period. Below $65, bond interest payments will be capitalized instead.

Some of EnQuest’s bond maturity terms and covenants also were relaxed.

In other news, EnQuest said the Scolty/Crathes subsea tieback development is ahead of schedule. First oil is expected by year-end 2016. The Scolty and Crathes discoveries are being developed as tiebacks to the Kittiwake platform.

Subsea 7 Wins Contract Offshore Egypt

Pharaonic Petroleum Co. has selected Subsea 7 to carry out the engineering, procurement, construction and installation of more than 40 km (25 miles) of rigid pipelines and associated structures for the new Atoll Field offshore Egypt, a news release said.

Subsea 7 said the engineering and procurement services have already started. The 105-km (65-mile) umbilical will also be installed, linking the field to shore. Offshore campaigns using Subsea 7 vessels—Seven Borealis, Seven Eagle and Seven Arctic—are scheduled to occur in second-half 2017 and early 2018, the company said in the release.

The contract is valued at between $150 million and $300 million.

Hurricane Snags FMC, Technip For Subsea Work

FMC Technologies and Technip, which will become TechnipFMC if their merger is approved, have been provisionally selected by Hurricane Energy to exclusively provide subsea solutions for the company’s Lancaster Early Production System (EPS) and the Greater Lancaster Area development.

Technip will become the subsea umbilicals, risers and flowlines provider, while FMC will serve as the subsea production systems provider.

The three have taken on front-end engineering studies and have worked to develop a fit-for-purpose concept for the Lancaster EPS.

“This has allowed us to reduce the scope and the cost of the development, and ensure full alignment among those driving the project forward,” Hurricane CEO Robert Trice said in a news release.

Hurricane has targeted a first-half 2017 sanction date for the West of Shetland development.

SapuraKencana Secures $215 Million In Subsea Contracts

SapuraKencana Petroleum Berhad has landed three contracts with a combined value of about $215 million, the company said in a news release.

Among these is an engineering and construction contract awarded by Oil and Natural Gas Corp. Ltd. for the B127 Cluster Pipeline RTR project. As part of the 20-month contract, the consortium of SapuraKencana TL Offshore Sdn. Bhd. and SapuraKencana HL Sdn. Bhd. will be responsible for the engineering, procurement, construction, installation and commissioning of 11 pipeline systems and associated topside modifications in B127 and surrounding Mumbai High fields located off the west coast of India, the release said.

In addition, Brunei Shell Petroleum Sdn. Bhd. has tapped SapuraKencana Drilling Asia Ltd. for tender assist drilling rig SKD Pelaut as a “bespoke technical solution for its development drilling campaign offshore Brunei Darussalam.” The contract, according to the news release, is for two years, but there is a two-year extension option.

The third contract, which will last about two months, was awarded by Petronas Carigali Sdn. Bhd. (PCSB) for underwater maintenance services for the Sepat mobile offshore production unit. The workscope for SapuraKencana Subsea Services Sdn. Bhd. includes inspection, maintenance, repairs, drilling support and other work for PCSB’s underwater facilities offshore Peninsular Malaysia up to 2,000 m (6,562 ft) water depth with diver intervention up to 300 m (984 ft), according to the release.

Petronas Awards Subsea Contract For Malaysia Project

Technip has been awarded a subsea contract by Petronas Carigali Sdn. Bhd. for the Samarang Redevelopment Project Phase 2 EOR in Malaysia.

Under this contract, Technip will manage the engineering, supply, construction, installation and commissioning (EPCIC) of flexible pipelines, with diameters ranging from 4 in. to 6 in. as well as EPCIC of associated platform I-tubes.

The contract will be executed by Technip’s operating center in Kuala Lumpur, Malaysia, and is scheduled for completion in third-quarter 2017.

The flexible pipelines will be manufactured at Asiaflex Products, Technip’s manufacturing facility in Tanjung Langsat, Johor, Malaysia. Technip’s vessels will be mobilized for installation works during first-half 2017.

Technip Lines Up EPCI Work For Dvalin Development

DEA has awarded the engineering, procurement, construction and installation (EPCI) contract for the smaller structures and pipelines as well as the subsea installation work of the Dvalin development to Technip Norge AS, a news release said.

The contract includes fabrication of smaller structures, the 12/16-in. pipe-in-pipe production flowline, the 12-in. gas export pipeline and the installation of pipelines as well as all subsea structures and umbilical for the Dvalin Field in the Norwegian Sea, the release said.

Production from the Dvalin Field, which will use a four-well subsea template connected to the Heidrun platform, is expected to begin in 2020. Recoverable gas and condensate reserves are estimated at about 18.2 Bcm and 0.4 MMcm, respectively.

Greater Stella Area Work Advances

Ithaca Energy Inc. continues to make progress at its Greater Stella Area development in the central North Sea, where plans include initially starting up five subsea wells tied back to the FPF-1 floating production unit.

In a third-quarter operational update, the company said Technip is wrapping up the remaining subsea commissioning work and the offshore commissioning program is continuing along with work to prep the topsides processing and utility systems for hydrocarbons.

“The scheduled completion of these activities remains in line with previous guidance, with first hydrocarbons from the Stella Field anticipated in November 2016,” Ithaca said in the update.

Ithaca has checked off from its to-do list towing the FPF-1 to the field and installing the dynamic risers and umbilical connecting the vessel to subsea infrastructure. In addition, the spurline connecting the vessel to the Norpipe system has been installed.

Remaining work includes manufacturing and installing pipeline pumps on FPF-1, Ithaca said.

—Staff & Reuters Reports

Offshore