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Cargill, UNIPEC UK to Charter Only Eco-Friendly Ships

Cargill, one of the world’s leading international transporters, and UNIPEC UK Company Ltd, trader of crude oil and oil products, announced today that they will only charter the more efficient vessels operating in the shipping market. This commitment is the first of its kind in the industry to reduce the existing fleet carbon emissions.

The announcement, from Cargill, Huntsman Corporation and UNIPEC UK who combined charter over 350 million tonnes of commodities annually, signifies a milestone for the vessel fuel efficiency ratings system, the Existing Vessel Design Index (EVDI), created by ship vetting specialist RightShip and published on ShippingEfficiency.org – an initiative launched by the Carbon War Room and RightShip to increase information flows around international shipping’s energy efficiency, as an GHG Emissions Rating (A-G rating) benchmarking system. The efficiency ratings system – containing efficiency information on over 60,000 vessels including container ships, tankers, bulk carriers, cargo ships – enables charterers to instantly see a ship’s theoretical greenhouse gas emissions and relative energy efficiency as determined by RightShip’s EVDI rated from A (most efficient) to G (least efficient), compared to ships of similar size and type.

“Cargill has introduced a senior management override on the use of the least energy efficiency vessels. By choosing the more efficient vessel available to us, we are making a strong statement to the market,” commented Jonathan Stoneley, Environment and Compliance Manager, Cargill Ocean Transportation. “We hope this action will demonstrate to ship owners that they can and should do more in terms of efficiency, and that the market will reward them and will also show other charterers the decision support tools available if they want to operate more efficiently. We will work together with customers, as best appropriate, to help them meet their environmental objectives linked to transportation and this rating system.”

Stoneley continued: “Cargill is committed to minimizing our environmental impact throughout our global operations. We do this by developing management systems and policies to ensure best practice environmental compliance and continually improving performance on criteria relevant to our business and operations. We partner with governments, non-governmental organisations, communities, employees and customers to leverage market-based solutions to reduce the environmental footprints of the supply chains in which we participate.”

Peter Boyd, COO of Carbon War Room commented: “This deal represents the first major capital shift on behalf of the charterers towards making greater efficiency a factor in their vessel chartering decisions. Cargill, Huntsman Corporation and UNIPEC UK should be congratulated for being the first to make this commitment. We’d encourage other charterers within the market, to look towards the simple and understandable ways to quantify, measure and track efficiency represented by the efficiency rating system and the A-G benchmark. Those that lead the curve on presenting more eco-efficient vessels will benefit from the choices charterers are making and the charterers themselves will see lowered operating costs through fuel efficiency – a win-win-win decision for the owner, the charterer and the environment.”

Warwick Norman, Chief Executive Officer, RightShip, added: “Cargill, Huntsman Corporation and UNIPEC UK have strong commitments to maximise efficiency on environmental grounds, and we are proud to provide them with the decision support tool they need to implement their environmental leadership position. With the common decision making framework first movers will have significant market advantage over competitors who are using traditional methods to evaluate efficiency.”

“Without this level of information it’s very difficult for charterers to make informed decisions on vessels based on their efficiency – for example, newer ships aren’t always more efficient than older ships. We’ve developed the Existing Vessel Design Index, or EVDI™, to estimate the amount of CO”

World Maritime News – Cargill, UNIPEC UK to Charter Only Eco-Friendly Ships.

USA: Tetra Buys UK’s Rig Cooling Specialist

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TETRA Technologies, Inc. has acquired Optima Solutions Holdings Limited (“Optima”) for GBP 40 million (approximately $62.7 million equivalent) plus contingent consideration to be paid in the future depending on profitability.

Optima is a leading provider of rig cooling services and associated products that suppress heat generated by the high-rate flaring of hydrocarbons during offshore well test operations. Established in 1999, Optima has grown rapidly and has served a diversified customer base in over forty countries from operational bases in Aberdeen, UK, and Perth, Australia. Optima’s expectations for continued growth are underpinned by excellent long-term relationships with key customers, increasing international expansion, and a robust market outlook.

Optima’s rig cooling systems provide safety from the extreme temperatures generated during flaring operations and enable high-rate well test operations to be performed without compromising installation integrity, installation operations and personnel safety. Optima’s rig cooling packages employ patented nozzle technology and a wide range of associated pumping equipment that provide users with exceptional performance, reliability and safety.

“With this acquisition, we are accelerating our strategic goal of offering our customers a broader range of well completion and production testing services, and we are expanding our presence in many significant global markets. Optima is a strong complement to our existing portfolio of well completion and production testing services, and we believe we can add value for Optima’s customers through our experience in, and understanding of, those businesses. We are impressed with the relationships and market position that Optima has built and intend to support them within the TETRA family. In addition, we expect this acquisition to be accretive to our consolidated earnings in 2012,” commented Stuart M. Brightman, TETRA’s President and Chief Executive Officer.

Managing Director and founder of Optima, Jamie Oag, stated, “We are very pleased with our new ownership structure. We see this as the next phase in our strategic plan, increasing Optima’s global presence in a manner consistent with our best in class safety and service quality performance standards.” Mr. Oag went on to say that, “Both my fellow founder, Peter Bartholomew, and I, will remain with Optima, along with the remainder of our experienced management and operations teams.”

Simmons & Company International served as financial advisor to TETRA and Ernst & Young served as financial advisor to Optima.

TETRA is geographically diversified oil and gas services company focused on completion fluids and other products, after-frac flow back and production well testing, wellhead compression, and selected offshore services including well plugging and abandonment, decommissioning, and diving.

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Mexico: Cal Dive Nets Second Pemex Contract

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Cal Dive International, Inc. announced that it has been awarded a contract by Pemex Exploración y Producción for the installation of a 20 inch subsea pipeline located in the Abkatun Pol Chuc Field in 73 meters of water.

The contract is expected to generate total revenue of approximately $46 million and will utilize two of the Company’s key assets. The offshore construction is expected to commence in the second quarter 2012.

Quinn Hébert, President and Chief Executive Officer of Cal Dive, stated, “We are pleased to announce our second contract win in Mexico for 2012. Mexico is shaping up to be a very active market in 2012 as expected. So far we have been awarded contracts in Mexico with aggregate expected revenue in 2012 of approximately $70 million compared to revenues generated from Mexico projects in 2011 of approximately $30 million.

Cal Dive International, Inc., headquartered in Houston, Texas, is a marine contractor that provides an integrated offshore construction solution to its customers, including manned diving, pipelay and pipe burial, platform installation and platform salvage services to the offshore oil and natural gas industry on the Gulf of Mexico OCS, Northeastern U.S., Latin America, Southeast Asia, China, Australia, the Middle East and the Mediterranean, with a fleet of 29 vessels, including 19 surface and saturation diving support vessels and 10 construction barges.

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USA: Cal Dive Wins USD 25 Million Offshore Decommissioning Contract

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Cal Dive International, Inc. announced today that it has been awarded a Field Abandonment and Decommissioning Contract from an operator in the Gulf of Mexico which includes the abandonment of sixteen wells, seven pipelines, and the removal of eight structures.

The contract is expected to generate total revenue of approximately $25 million and will utilize two of the Company’s key assets. Work on this project will commence in the first quarter of 2012 and is expected to be completed by the end of June 2012.

Quinn Hébert, President and Chief Executive Officer of Cal Dive, stated, “We are pleased to announce the award of our first decommissioning program in the Gulf of Mexico for 2012. We expect 2012 to be an active year for salvage work in the Gulf of Mexico as regulators encourage producers to remove idle iron. This project highlights Cal Dive’s ability to provide full service solutions to our clients.”

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Kosmos Energy Announces 3Q Results. Provides Update on Operations Offshore Ghana

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Kosmos Energy  announced yesterday financial results for the third quarter 2011. The Company generated net income attributable to common shareholders of $52 million in the third quarter of 2011, or $0.13 per basic and diluted share. This compares to a net loss attributable to common unit holders of $99 million for the same period in 2010.

Highlights for the third quarter 2011 include:

  • Two Jubilee liftings totaling approximately 2 million barrels of oil, net to Kosmos
  • EBITDAX of $191 million
  • Grew total liquidity by over $115 million to nearly $1.1 billion
  • Exploration discovery at Akasa on West Cape Three Points Block
  • Successful Enyenra-3 appraisal well on Deepwater Tano Block
  • Jubilee Unit participation interest increased as a result of expert redetermination
  • Expanded exploration portfolio, with increase in offshore Morocco position to approximately 12 million gross acres

Third-quarter 2011 oil revenues were $230 million, or $115.50 per barrel sold. Production expense was $24 million, or $12.13 per barrel, and depletion and depreciation was $43 million, an average of $21.36 per barrel. Exploration expense for the third quarter 2011 was $11 million. General and administrative costs were $39 million, with over 50 percent related to non-cash items, primarily the Company’s long-term equity incentive compensation program. Interest expense was $17 million. The effective tax rate for the third quarter 2011 was 49 percent.

Cash and cash equivalents at the end of the third quarter 2011 was $656 million, with long-term debt of $1 billion. Total liquidity, including cash and cash equivalents and available borrowing under the debt facility, was nearly $1.1 billion.

Brian F. Maxted, President and Chief Executive Officer, commented, “Our results for the third quarter were very strong, supported by our oil liftings and continued robust Brent pricing. While production at Jubilee has not ramped up as quickly as planned, the ultimate resources recoverable from this giant field are unchanged, and we continue to be encouraged by its reservoir performance. We had a number of positives in our exploration and appraisal drilling programs for the quarter, with successes on both of our Ghana blocks, which continue to highlight the value upside of our Ghana assets. At the same time, we are further enhancing the Company’s portfolio of exploration opportunities, capturing substantial acreage offshore Morocco during the quarter.”

Jubilee Unit Redetermination

A redetermination of the Jubilee Unit tract participation interest was recently completed, resulting in an increase in Kosmos’ Unit interest. As determined by an independent expert analysis, a greater portion of the Jubilee field resources reside in the West Cape Three Points Block than was established under the original tract participations. The original tract participations in the Jubilee Unit were 50 percent for both the West Cape Three Points and Deepwater Tano Blocks. After expert analysis, the Unit interests have been changed to 54.37 percent for the West Cape Three Points Block and 45.63 percent for the Deepwater Tano Block. Accordingly, the Company’s Jubilee Unit interest increased to 24.08 percent from 23.51 percent.

Operational Update

Ghana

All of the Jubilee Phase 1 wells have been drilled, and current oil production is approximately 80,000 barrels per day. Identified completion issues require one of the producing wells to be sidetracked, as well as downhole remediation on certain other wells. Once these completion issues have been resolved, production is expected to continue ramping up toward the FPSO facility capacity. The J-7 production well is currently being sidetracked, with completion expected at the beginning of 2012. Additionally, the Phase 1A development, including five production and three injection wells, is being planned to commence drilling in 2012.

Kosmos is currently drilling the Teak-3 appraisal well on the West Cape Three Points Block, testing a potential updip stratigraphic extension of the discovery wells. Results at Teak-3 are expected by the end of November 2011. The Teak-4 appraisal well is scheduled to begin drilling late in the first quarter of 2012.

On the Deepwater Tano Block, Kosmos and its partners are currently redrilling the Enyenra-1 (previously known as Owo-1) discovery well, with plans to perform a drill stem test at that location. Immediately following operations at Enyenra-1, the Enyenra-4 appraisal well will be drilled over 4 miles downdip from Enyenra-2, on the south flank of the discovery. Results at Enyenra-4 are expected in the first quarter of 2012.

New Ventures Portfolio

Kosmos’ new ventures team is pursuing a number of opportunities to further enhance the Company’s exposure to new petroleum systems. Kosmos recently entered into a new petroleum agreement for the Essaouira Block offshore the Kingdom of Morocco. The Essaouira Block covers 2.9 million gross acres and is located north of the Company’s Foum Assaka Block. Both blocks are in the Agadir basin. Kosmos will be the operator of the Essaouira Block with a 37.5 percent working interest. As a result of the new agreement, Kosmos’ total acreage position offshore Morocco has grown to approximately 12 million gross acres. The Company is planning an approximately 5,000 square kilometer seismic shoot offshore Morocco on the Foum Assaka and Essaouira Blocks, targeted to begin before year-end 2011.

Kosmos Energy Ltd. is an international oil and gas exploration and production company focused on underexplored regions in Africa. The Company’s asset portfolio includes major discoveries and exploration prospects with significant hydrocarbon potential in several West African countries. Kosmos is listed on the New York Stock Exchange and is traded under the ticker symbol KOS.

Source: Kosmos Energy, November 11, 2011

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China: Sinopacific Group Delivers Ulstein Design OSV to Neptune Offshore

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In the afternoon of October 26, Sinopacific Shipbuilding Group, China’s leading shipbuilding enterprise held the ship naming and delivery ceremony at its Zhejiang shipyard for SX130, the global first fabricated model of Offshore Support Vessel (OSV) built for Neptune Offshore AS.

Gracing this occasion were Ningbo Feng Hua Municipal Party Secretary Rong Xuehai, Sinopacific Shipbuilding Group Chairman and CEO Simon Liang, Sinopacific Shipbuilding Group Executive Manager Lin Bo, and representatives from other government departments, the bank, the shipowner, and the ship inspection department.

Together, they witnessed the official naming of the SX130 sister pair as “Neptune Despina” and “Neptune Larissa”. This year alone, Sinopacific Shipbuilding Group has successfully delivered three global first fabricated high-end OSVs, such as GPA 696 in April and PX105 in September. With advanced construction capabilities that are rare among global OSV manufacturers, this reflects the group’s ability to manufacture deep-water OSVs and reinforces its position as a leading manufacturer of top-quality OSVs.

SX130 is a classic representative among high-end OSVs as a PSV / IMR vessel used for the inspection, maintenance and repair of offshore facilities to ensure normal and safe working condition. It can meet operational demands with efficient solution for satisfying the general demands of the offshore industry as well. The SX130 was designed by the world-renowned Norwegian design firm Ulstein Design AS, incorporating its exclusive Ulstein X-BowTM. This design guarantees steady navigation and operations in adverse offshore environments, proving higher safety levels. Furthermore, the reduction in sailing resistance effectively reduces fuel consumption and supports the goal of energy conservation. The construction and configuration of the SX130 follows the strict European standards, thereby allowing inspections, repairs and installations to be completed at depths of 3,000 meters and even in dire environments of the North Sea where environmental protection requirements are more demanding.

While the design and construction of high-end OSV was previously concentrated in Europe and North America, Sinopacific Shipbuilding Group has “emerged from the competition” based on a forward-looking strategy of differentiated products. Building on a unique strategic positioning of “Leadership in Niche Markets”, the group ultimately won the trust of and OSV orders from European and North American companies based on its merits of excellent project management and technical capabilities, world-class OSV construction facilities and the integrated capabilities of world-class designers and suppliers.

“OSV is akin to the commercial ship in the field of offshore engineering. Its broad application means that all offshore oil and gas exploration projects need it. So I am confident about the future prospects of the OSV market. Although we are taking mostly international OSV orders at present, the local high-end OSV market demand is growing and possesses tremendous market potential.” said Sinopacific Shipbuilding Group Chairman and CEO Simon Liang, “Opportunity only favours those who are prepared. We will continue to be strategically-driven, leveraging on a business model of innovative and advanced technologies to maintain our lead in the niche shipbuilding markets.”

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Eagle Ford target of more pipeline, fractionation plans

By OGJ editors

HOUSTON, May 10 — DCP Midstream LLC, Denver, and Targa Resources Partners LP, Houston, have reached agreements that will, according to the joint announcement, provide a “long-term anchor commitment” to DCP Midstream’s Sandhills Pipeline and an interconnect of the pipeline to a new delivery point with Targa’s Cedar Bayou fractionators’ plant at Mont Belvieu, Tex.

DCP is negotiating with several customers, it said, to sign long-term commitments to the Sandhills Pipeline.

Additionally, DCP and Targa reached a long-term anchor commitment by DCP for a new 100,000-b/d fractionation expansion at the Mont Belvieu plant, which Targa operates and of which it is majority owner.

According to Tom O’Connor, DCP Midstream’s chairman, president, and chief executive officer, the agreements are to cover increased production of NGLs from West and South Texas.

In November 2010, DCP Midstream began an open season and is currently securing right-of-way and environmental permits for the Sandhills Pipeline. The new 700-mile system will move Y-grade NGLs from gas plants in the Permian basin and South Texas to various fractionators along the Gulf Coast along with the Mont Belvieu NGL hub.

The Sandhills Pipeline will serve NGL transportation needs at Targa’s gas plants, existing DCP gas plants, and the 200-MMcfd DCP Eagle plant designed to serve Eagle Ford shale gas development. The Sandhills pipeline and CBF target first-half 2013 for completion of construction and start up.

Significantly, the Sandhills Pipeline along with CBF’s new fractionation expansion will allow DCP to handle producers’ increased liquid-rich natural gas production from the new Avalon Shale-Bone Springs areas, said the announcement, as well as the Eagle Ford shale area.

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USA: Chevron Selects McDermott for Jack and St. Malo Fabrication and Installation Work

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McDermott International, Inc. , announced today that one of its subsidiary companies was awarded fabrication and installation work from Chevron U.S.A. Inc. to support the development of the Jack and St. Malo fields in the Gulf of Mexico. The project will be included in McDermott’s first quarter 2011 bookings.

Work will begin in 2013, with the start of fabrication of 21 rigid jumpers at McDermott’s Morgan City fabrication facility in Louisiana. Offshore installation will begin in early 2014 using McDermott’s subsea construction vessel North Ocean 102 (“NO102”) and the DB16.

“We are pleased to be able to support Chevron’s deepwater developments in the Gulf of Mexico and believe that our combined solution of NO102’s high payload and top tension capacity coupled with our ability to fabricate the high spec jumpers in house provides a unique benefit for this project’s delivery,” said Stephen M. Johnson, President and Chief Executive Officer of McDermott.

The NO102 and its crew will transport and install more than 60 miles of umbilicals, including three control and two power umbilicals. The jumpers and remaining subsea controls system components, including more than 80 flying leads, will be installed by the DB16.

Located in up to 7,150 feet of water in the US Gulf of Mexico Walker Ridge lease blocks, the Jack South and St. Malo North and South subsea drill centers tie back to the Jack and St. Malo floating production platform.

More about North Ocean 102

The 427-foot NO102 enables McDermott to offer versatile installation capabilities in the flexible pipe and product market worldwide. The vessel has two cranes and a moon pool to support deepwater subsea construction work and has a fast transit speed. It is currently equipped with a 7,000-ton capacity cable and umbilical and flexible pipe carousel with horizontal lay system. Plans are underway to upgrade the vessel’s capability by installing a high-capacity flexible-lay system for ultra deepwater installation work. The upgrade will include installation of a new 250-ton crane.

North Ocean 105 (NO105), the sister ship to NO102, is currently under construction at a Spanish shipyard. The 427-foot vessel will be outfitted with a high capacity rigid-reeled pipe-lay system with top-tier payload capacity. The system will also accommodate installation of flexible products including submarine cables and umbilicals and flexible pipelines. The anticipated delivery date of the NO105 is 2012.

ABOUT McDERMOTT

McDermott is a leading engineering, procurement, construction and installation (“EPCI”) company focused on executing complex offshore oil and gas projects worldwide. Providing fully integrated EPCI services for upstream field developments, the Company delivers fixed and floating production facilities, pipelines and subsea systems from concept to commissioning. McDermott’s customers include national and major energy companies. Operating in more than 20 countries across the Atlantic, Middle East and Asia Pacific, the Company’s integrated resources include more than 15,000 employees and a diversified fleet of marine vessels, fabrication facilities and engineering offices. McDermott has served the energy industry since 1923.

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