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July-August 2015

AS IAN O I L & GAS

AOG

EPCIC challengesoffshore Myanmar page 18

Qatar to face risingLNG competition page 14

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3/32July · August | AOG 3aogdigital.com

EDITOR’S COLUMN

5 2Q 2015 losses and cutbacksA review of 2Q 2015 net losses and fur ther spending cutsannounced by international oil and gas companies alsofocused in Asian explorations.

REGIONAL UPDATES

6 BriefsPetroVietnam and Murphy Oil to jointly explore oil andgas reserves in Vietnam and more news from Australia,China, Indonesia, New Zealand, Philippines and theMiddle East.

FEATURES

10 Filipinos still in demand abroadMature markets in the Middle East and Asia continueto have a steady demand for Filipino oil and gasprofessionals.

12 Making the most of M.O.S.T.Weatherford’s Cham Soon Hoe and Aung Din explainhow operators in Vietnam and Australia have benefitedfrom the Mechanical Outside-Latch Single Trip (M.O.S.T)system during subsea well abandonments.

14 Qatar LNG challengedWith more competitors entering the global gas market,Qatar’s LNG exports to Asia could be further tested.Audrey Raj reports.

16 Fabrication scales new heightsSingapore-headquartered TRIYARDS continues to expandits fabrication expertise. Audrey Raj explains.

18 COOEC goes internationalAudrey Raj speaks with COOEC about the group’s firstinternational EPCIC project challenges and more.

GEOFOCUS: CHINA

20 Protecting IPR in ChinaTo remain competitive in the Chinese market, foreign oiland gas enterprises must protect their intellectual propertyrights in China, explain Brad Chin and Kevin Tamm ofBracewell & Giuliani LLP.

24 China eyes Russian reservesRussia’s decision to allow Chinese investors acquirecontrolling stakes in its oil and gas fields come withpotential risk. Eugene Gerden investigates.

PRODUCTS & TECHNOLOGY

26 SolutionsNew tools and software to improve performance,production, and modeling.

SPOTLIGHT

27 Powering energy managementDavid Farmer, Eaton’s vice president of global projects foroil and gas discusses energy efficient alternatives for oiland gas sustainability in Southeast Asia.

COMPANY NEWS

28 Activity OneSubsea and Subsea 7 inked an agreement to jointlydeliver integrated subsea development solutions, plusother regional news.

FACTS & FIGURES

30 Numerology A capsule view of interesting industry statistics.

Contents

On the cover

Onshore construction of the

Zawtika EPCIC project is in its

final stages, preparing for off-

shore instal lation at COOEC’s

Tanggu fabrication yard fea-

tured in this issue’s cover.

Read more on page 18.

Photo from COOEC .

ao g d i g i t a l.co m

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J u l y - A u g u s t 2 0 1

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A S IA N

O I L & G

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i s i n g

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Editor’s Column

2Q 2015 losses and cutbacksAlthough consumers around the world have welcomed therecent slump in oil costs, as prices stay low it is continu-ing to hurt oil and gas explorers, as drilling operations become

more unprofitable.

As AOG goes to press, several international oil and gas

companies also involved in Asian explorations announced 2Q

2015 net losses and cutbacks to stay afloat the sinking envi-

ronment.

US-based Murphy Oil reported a net loss of US$73.8 mil-

lion in 2Q 2015, down from net income of $129.4 million in

2Q 2014. The firm, which is also focused in Southeast Asian

exploration, said loss from continuing operations this quarterwas $89 mill ion, compared to a profit of $142.7 million earned

in 2Q 2014.

In Malaysia, during 2Q, Murphy completed a five-well drill-

ing program at the Belum field in shallow water offshore Sar-

awak, and spud oil wells at the Permas shallow water develop-

ment. Murphy is looking to tap into Vietnamese reserves with

PetroVietnam to jointly develop the Block B gas project in the

Malay Tho Chu basin and some blocks in the Cuu Long basin.

Canada-headquartered Husky Energy’s profit plunged ap-

proximately 80% in 2Q 2015, due to weaker Canadian dollars,

lower oil price and corporate tax hike, the company said.

Net earnings were CA$120 million, compared to CA$628

million a year ago, while cash flow from operations wereCA$1.2 billion, as opposed to CA$1.5 billion in 2Q 2014.

According to CEO Asim Ghosh, Husky drew strength from

its diverse portfolio and fixed-price gas sales in the Asia Pacif-

ic region this quarter. Combined gross gas sales volumes from

the group’s Liwan gas project offshore China, including the

Liuhua 34-2 field, averaged 295 MMcf/d, up about 13% from

1Q 2015. Husky is on track to achieve its CA$400-600 mil lion

target in cost savings this year, with approximately CA$575

million locked in to date.

Supermajor Royal Dutch Shell, operator of the Gumusut-Ka-

kap development in Malaysia, earned $3.4 billion in 2Q 2015,

compared to $5.1 billion same time last year.

Whereas its Gumusut-Kakap joint venture partner, Houston-headquartered ConocoPhillips reported a net loss of $179

million in 2Q 2015, compared with 2Q 2014 earnings of $2.1

billion. ConocoPhillips will lower 2015 capital expenditure

guidance from $11.5 billion to $11 billion and operat ing cost

guidance from $9.2 billion to $8.9 billion.

On the other hand, Shell said it would cut 6500 jobs as part

of cost cutting plans, plus reduce about $7 billion in capital

investment, all so to prepare for the prolonged downturn.

US major Chevron, which also partners with Shell in the

Malampaya deepwater gas-to-power project in the Philippines,

plans to axe 1500 jobs to slash cost by $1 bill ion.

Chevron’s earnings for 2Q 2015 were $571 million, while 2Q

2014 saw an income of $5.7 billion. Sales and other operat ing

revenues were $37 billion, compared to $56 billion a year ago.

Chevron has been moving to shed assets in the region. In

March, Chevron completed the sale of the company’s 50%

interest in Caltex Australia, and followed that sale in June by

shedding its Vietnamese assets, which included acreage off

the country’s continental shelf and an offshore pipeline proj-

ect, in a deal struck with PetroVietnam. Last year, Chevron

opted to sell its Cambodian subsidiary to Singapore’s KrisEn-

ergy for $65 million.

Chevron CEO John Watson noted that the upstream business

was particularly hit hard, as lower prices reduced revenues

and triggered impairments and other charges.“We’re getting our cost structure down, through renegotia-

tions across the supply chain and by sizing our contractor and

employee workforce going forward. Project execution on the

Gorgon and Wheatstone Australian LNG projects is a priority

for us,” Watson said.

Despite the sharply lower oil price, France’s Total had a net

income of $3.1 billion, a decrease of only 2% compared to the

same period last year. The group expect s to exceed its 2015

objective to cut operating costs by $1.2 billion in 2015 and

reduction of 2015 capex to $23-24 billion.

Since the beginning of 2Q 2015, Total started first produc-

tion at the Termokarstovoye gas field in Russia, achieved

positive appraisal of the Elk-Antelope gas fields in Papua NewGuinea, plus opened its new lubricant plant in Singapore.

In Russia, UK supermajor BP has also made some progress.

In June, an agreement was inked to purchase 20% interest in

Rosneft’s Taas-Yuryakh Neftegazodobycha (Taas) subsidiary,

creating a new joint venture in East Siberia.

However, BP reported a replacement cost loss for the quarter

of $6.3 billion, citing low oil prices and settlement charges re-

lated to the 2010 Deepwater Horizon oil spill, which occurred

in the US Gulf of Mexico. AOG

Audrey Raj

Editor

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6/32AOG | July · August 20156 aogdigital.com

Regional Briefs

AS IAN O I L & GAS

AOG

July · August 2015

Australia

• TRANSERV SET TO

SPUD WARRO FIELD

Transerv Energy is set to drill the

onshore Warro gas field, which aims to

unlock 8-10 Tcf of potential gas reserves.

Located 200km north of Perth, Warro

is 30km from the Dampier-to-Bunbury

and Parmelia pipelines, which will carry

gas into Western Australia’s southwest

gas market.

Warro-5 and Warro-6 wells will be

drilled 3.5km to the south and 1.5km

southwest, respectively, of the previ-

ous wells on the giant Warro field to

4250mRT total depth.

• AWE REDUCES YOLLA RESERVES

New data obtained from the recently

drilled Yolla-5 and Yolla-6 development

wells has resulted in a reduction in the

estimated original gas in place for the

Yolla field, says operator Origin Energy.

Joint venture pa rtner, AWE’s managing

director Bruce Clement, says the updated

reserves at Yolla will result in less gas

production later in the field life.

“But overall it is not expected to have

a material impact on production or cashflow during the next three to four years,”

he says.

AWE has chosen to adopt the prelimi-

nary reassessment of the operator and re-

duce its share of 2P reserves for the Yolla

field by 5.5 MMboe, down to 13 MMboe.

China

• CHINESE YARD BAGS UAE ORDER

Chinese shipbuilder, SINOPACIFIC

Shipbuilding Group won the bid for the

construction of nine anchor handling tug

supply (AHTS) vessels from Abu Dhabi

National Oil Co. (ADNOC) and its wholly

owned subsidiary, ESNAAD.

The winning design was the SPA80A,which is an AHTS with elect ric propul-

sion system and a bollard pull of 80mt

designed by Shanghai Design Associates,

the SINOPACIFIC OSV design team.

All nine vessels scheduled for deliv-

ery in 2017 will be able to operate under

complex conditions of shallow water,

high salinity, high temperatures and

high humidity in the Persian Gulf.

• SINO GAS TO

COMMISSION FIRST GAS

Construction of the Linxing CentralGathering Station (CGS) is now com-

plete and commissioning of first gas is

expected to kick-start, reports Sino Gas

and Energy.

This includes gathering lines for the

first batch of seven wells to be tied into

the Linxing CGS, including TB-1H the

first horizontal well dr illed in 2013 and

tested in 2014 at a rate of 4.93 MMscf/d.

Pilot gas sales from the Linxing CGS

are anticipated to commence following

completion of commissioning activities.

• CNOOC STARTS LUDA 10-1

Production has commenced at the Luda

10-1 comprehensive adjustment project,

in Liaodong Bay of Bohai.

The Luda 10-1 oil field sits in water ap-

proximately 30m deep.

In addition to fully utilizing the exist-

ing facilities of Luda 10-1, this adjustment

project has also built one wellhead plat-

form. There are currently 13 producing

wells producing approximately 3300bo/d.

The adjustment project is expected

to reach peak production of 6000 b/d in

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REPRESENTATIVES

Asia Pacific

Eugene TumankenTel: +65 8700 9570

[email protected]

North America

John Lauletta (N-Z)

Phone: +1 713-874-2220

[email protected]

Amy Vallance (A-M)

Phone: +1 281-758-5733

[email protected]

Italy

Fabio Potesta

Tel: (+39) 10 570 4948

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Netherlands

Arthur Schavemaker

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Finland/Austria/Germany

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7/32July · August 2015 | AOG 7aogdigital.com

2016. CNOOC operates Luda 10-1 with

100% interest.

Indonesia• LION TO COMMERCIALIZE

GAS FIND

Lion Energy is looking to commercial-

ize its Lofin-2 gas discovery at the Seram

(Non Bula) production sharing contract

(PSC) in Eastern Indonesia.The Seram joint venture has suspended

the Lofin-2 appraisal well, that flowed gas

at about 17.8 Mcf/d, as a potential producer.

Results exceeded pre-drill expecta-

tions and confirmed a material discovery

for the company even with its 2.5% stake

in the Seram PSC.

• COOPER REVISITS SUMATRA

DRILLING PLANS

Cooper Energy has rescheduled its

drilling plans for the Sukananti KSO

in South Sumatra, Indonesia, whichcomprises of the Sukananti, Bunian and

Tangai fields.

The firm says the decision was made

to prioritize drilling of the Bunian-4

appraisal well, plus focus on appraisal

of the Bunian field reserves, which has

been identified to be hydrocarbon rich.

This includes the deferment of the

Tangai-5 development well drilling,

which had originally been scheduled to

follow Bunian-3.

Bunian-4 will be drilled on a deviated

trajectory to a subsurface target 380mfrom the surface location and 450m from

the Bunian-3 ST2 subsurface location at

the top of the TRM3 sandstone.

India• BG INDIA IN MUKTA-B PAYDAY

BG India achieved first oil production

from Mukta-B, a four-legged wellhead

unmanned platform in the offshore

Bombay basin.

BG alongside partners, Oil and

Natural Gas Corp. (ONGC) and Reliance

Industries are developing the Panna-Mukta oil and gas fields through well in-

tervention and infill drilling campaigns.

Pipelines have also been successfully

completed as par t of the project.

• L&T WINS ONGC EPCI

Mumbai-based L&T Hydrocarbon

Engineering bagged an offshore contract

from Oil & Natural Gas Corp. (ONGC)

valued at 2715 crores (US$420 million).

It encompasses the engineering,

procurement, construction and installa-

tion (EPCI) for the Bassein development

project offshore India.

The work scope includes one process

platform, compression facilities, one

nine-slot wellhead platform, topside

modification on existing platforms, as-

sociated subsea pipelines and one living

quarter platform in the Bassein field.

Malaysia• MEO, BROOKE IN MALAYSIAN E&PMEO Australia and Brooke Dockyard and

Engineering Work Corp.,will jointly bid on

oil and gas exploration opportunities with-

in Sarawak and the whole of Malaysia.

Under the agreement, MEO will pro-

vide technical and evaluation assistance

to Brooke, and in return Brooke will

fund the evaluation activities and the

exploration component of the joint bids.

At this initial stage, under the agree-

ment, Brooke will have a 75% participat-

ing interest and MEO a 25% participat-

ing interest.Brooke will bring Malaysian content

to MEO having access to local fabrica-

tion and construction capability, for both

onshore and offshore facilities.

Middle East• VALLIANZ WINS

MIDDLE EAST OSV

Vallianz Holdings has signed new

contracts valued up to US$458 million

with a national oil company (NOC) in the

Middle East.

This will see the Singapore-based firmlengthen the charter duration for 19 of

its offshore support vessels currently

deployed to this repeat customer.

It includes 15 anchor handling tug

supply vessels and four platform supply

vessels (PSV), which will continue to be

used by the NOC until June 2018, with an

option to extend for two more years until

June 2020.

This follows the company’s $300 mil-

lion deal to supply two self-elevating

platforms to be deployed from 3Q 2015

for a period of five years with anotherMiddle Eastern NOC.

New Zealand• MOSMAN OPERATIONS UPDATE

Mosman Oil and Gas provides operations

update of its Murchison, Petroleum Creek

and Taramakau permits in New Zealand.

Land access agreements are in prog-

ress with the Tasman District Council for

the Murchison permit, the firm says.

Geology and engineering works are

currently in progress, and the welldesign is being finalized as a 1200m

vertical well.

There are a series of formalities and

approvals to be completed before drill-

ing, which is still anticipated in 2015,

conditional on a number of matters,

including funding.

The Petroleum Creek permit has sig-

nificant potential, with focus now on the

larger deeper structures.

Drilling and flow tests on the Crestal

area demonstrated oil generation and

migration. The core data provided infor-mation on the Cobden Limestone, and

confirmed the reservoir properties.

The Taramakau permit surrounding

Petroleum Creek shares similar geological

characteristics, and prospective play types.

Next round of seismic acquisition is sched-

uled for later this year or early next year.

Philippines• MAERSK VENTURER HEADS TO

PALAWAN

Drillship Maersk Venturer will mobilize

to the Hawkeye-1 exploration well, off-shore Palawan basin in the Philippines.

Contracted by field operator Otto

Energy, the ultra-deepwater dril lship

will begin mobilization 31 July, accord-

ing to joint venture par tner, Red Emperor

Resources.

Red Emperor’s managing director,

Greg Bandy says, “this positive progress

would make the next few months very

exciting for shareholders, and we can

expect Hawkeye-1 to spud early August.”

Currently stacked in Labuan, Malaysia,

Maersk Venturer will take less than amonth to drill the well.

Malaysia• STEEL CUT FOR PETRONAS FLNG 2

Malaysian oil major PETRONAS celebrat-

ed the official steel cutting of its second

PETRONAS floating liquefied natural gas

(PFLNG 2) facility, designed for the Rotan

field, 130km offshore Sabah in Malaysia.

To be built at the Samsung Heavy

Industries (SHI) shipyard in South Korea,

the steel cutting signifies the beginning

phase of the hull and topsides of the

PFLNG 2 with a weight of 152,000 tonne.

Designed for deepwater operations in

water depths ranging from 500-1500m,

PFLNG 2 will have a production capacity of

1.5 MTPA and house up to 150 personnel.

The Block H project in Rotan field

offshore Sabah is sanctioned by operator

Murphy Oil and PETRONAS.





Russia, a well was completed using

“openhole gravel packing” in a horizon-

tal section of 1000m.

Rosneft and Statoil plan to hold wells

testing and determine further prospects

and methods of PK1 layer development

based on the testing results.

Implementation of the project may

allow effective development of about 544

million tonne of geological oil in placeat the North-Komsomolskoye field in the

short term.

• PETROVIETNAM, GAZPROM

BOOST COLLABORATION

PetroVietnam and Russian energy com-

pany Gazprom inked an agreement to

jointly develop Nagumanovskoye and

Severo-Purovskoye fields in Russia.

The Nagumanovskoye field in the

Orenburg region has 5.8 Bcm of proven gas

reserves and approximately 1.6 million

ton of recoverable condensate reserves and960,000 ton of recoverable oil reserves.

The Severo-Purovskoye gas and con-

densate field in the Yamal-Nenets area

has 45.5 Bcm of gas reserves and approxi-

mately 6.8 million ton of recoverable

condensate reserves.

Singapore• KEPPEL INKS GOFLNG CONVERSION

Keppel Shipyard has signed its third con-

tract with Golar Gandria worth approxi-

mately US$684 million for conversion

works.This will see Keppel Shipyard convert

Golar’s Moss type liquefied natural gas

(LNG) carrier, the Gandria, into a Golar

Floating LNG (GoFLNG) facility.

GoFLNG Gandria will be delivered

approximately 31 months after Keppel

Shipyard receives a notice to proceed,

which is expected to be in 2016.

UK-based Golar LNG CEO, Gary Smith

says Keppel has previously performed

the conversions of three LNG carr iers to

floating storage and regasification units

for the firm. “We are now on track to re-peat that success in our floating liquefac-

tion efforts as well.”

• VIKING WINS LAND RIG CHARTER

SGX-listed Viking Offshore and Marine

has secured a 48-month charter for a sec-

ond land drilling rig system for approxi-

mately US$31 million.

Viking’s subsidiary Viking LR2 Pte

Ltd., will charter the 1500 bhp train type

land rig and related drilling equipment

system to a Chinese land rig specialist.

It will be immediately deployed on a

North Af rican oil field concession jointly

owned by a South Asian energy operator

and the local energy authority.

Viking had acquired from and leased

back its first land rig in September 2014

to the same charterer, which used it to

uncover natural gas.

After positive assessment of hydrocarbon

potential in the locality, the second rig was

chartered to accelerate drilling activities.“The second charter enhances our

portfolio of earnings-accretive assets in a

market environment of low oil prices. We

intend to capitalize on our track record

to build up our charter fleet to enhance

shareholder value,” executive director

Daniel Lin says.

Thailand• MUBADALA IN NONG YAO PAYDAY

Mubadala Petroleum commenced oil pro-

duction from the Nong Yao field offshore

Thailand.Nong Yao is located in the G11/48 license

in the southern Gulf of Thailand, about

165km off Thailand in 75m water depth.

Production at Nong Yao is expected

to reach a peak rate of approximately

10,000 b/d, as more production wells are

completed.

Proved and probable reserves con-

tained in Nong Yao’s primary reservoirs,

and recoverable by water injection are es-

timated to be in the order of 12.4 MMbbl.

The facilities comprise a wellhead-pro-

cessing platform (WPP) and a minimumfacility wellhead platform (WHP), with

crude export via a floating storage and

offloading (FSO) vessel. The facilities

have production capacity of up to 15,000

b/d of oil and 30,000 b/d of fluids.

Vietnam• MURPHY EYES VIETNAM

PetroVietnam and Murphy Oil signed an

agreement to jointly develop oil and gas

projects in Vietnam and the US.

Senior officials from both enterprises got

together at the US Chamber of Commerceto discuss potential opportunities.

Murphy – which is involved in

field operations in Southeast Asia,

Australia, the Gulf of Mexico and the

Mediterranean – is now looking to tap

into Vietnamese reserves.

The international oil major is particu-

larly keen to participate in the develop-

ment of Block B gas project in the Malay

Tho Chu basin and some blocks in the

Cuu Long basin south of Vietnam, while

PetroVietnam has interest in Murphy’s

Gulf of Mexico projects.

•

• NIDO SHOWS GALOC

RESOURCE ESTIMATES

Nido Petroleum has released the results

of an independent contingent resources

assessment of the mid-Galoc area of the

Galoc oil field in the northwest Palawan

basin, of fshore Philippines.

Independent assessment by Gaffney

Cline and Associates (GCA) estimates

area to contain 1C contingent resourcesat 6.2 MMstb on a gross basis.

The 2C and 3C gross contingent re-

source estimates a re 9.5 MMstb and 14.6

MMstb, respectively.

For Nido, independent contingent

resources estimation is a key milestone

in the plan to develop the mid-Galoc area

of the field. The firm has 55.88% working

interest in the Galoc oil field.

Russia• ROSNEFT, STATOIL DRILL

NORTH KOMSOMOLSKOYE FIELDRosneft and Statoil completed drilling

works, as part of the pilot project at the

PK1 layer of the North-Komsomolskoye

field onshore Russia.

The North-Komsomolskoye oil and

gas condensate field is located in the

Purovsky and Nadymsky regions of the

Yamalo-Nenets Autonomous District.

It has complex geology associated with

an oil rim of highly viscous oil, as well

as an extensive gas cap. Rosneft and

Statoil implemented extended logging,

including core and fluid samplings.Also, for the first time onshore in

Papa New Guinea• HERITAGE FINDS

NO GAS AT KWILA-1

Kwila-1 exploration well in PPL 337 in

Papua New Guinea (PNG) was drilled at

a depth of 3281ft and wireline logs have

been run, according to joint venture part-

ner Kina Petroleum Ltd (KPL).

A number of porous, deepwater sand-

stones were intersected but no moveable

gas was observed. There were no zones

that warranted testing within the drilled

section of the well.

However, slightly higher gas satura-

tions were noted within the deeper sands

and may be the cause of the anomaly

recognized on seismic data and previously

thought to be a hydrocarbon effect.

Kina’s managing director, Richard Schro-

der says, “Kwila-1 and Raintree-1 were the

first wells drilled in North Guinea for over

22 years. Both wells drilled independent ob-

jectives and have advanced our knowledge

of the petroleum play in this basin.”Content is copyright protected and provided for personal use only - not for reproduction or retransmission.



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10/32aogdigital.com

By Audrey Raj

Filipino oil and gas workers are still very much in de-mand among international oil majors, despite the marketdownturn.According to recruitment specialist, Orion Group, the de-

mand for skilled Filipinos has increased over the years, and

now they can be found in almost every country, including

Russia and the Middle East.Although Philippines is another fast growing economy in

Asia, Orion says unemployment among the locals still remains

high, due to a shortage of domestic work opportunities.

To find out more, AOG interviewed the founder of Filipino

International Professionals (FIP), Victor Cabiles, and Rowena

Espiritu-Gaspar, Air Energi’s country manager for Singapore

and contract recruitment manager for Asia Pacific.

Currently residing in Pennsylvania, Cabiles is originally

from the Philippines. He is also director of international

relations at the Southpointe Marcellus Shale Chamber of

Commerce.

Having been with Air Energi for 14 years, Espiritu-

Gaspar leads the contract recruitment team in the AsiaPacific region, plus is responsible for ensuring growth

and profitability in Singapore.

What’s your view on the demand

for oil and gas Filipino workers overseas?

Espiritu-Gaspar: Over the last decade, there has been a

strong and steady demand for experienced technical engi-

neers and other specialists from the Philippines.

Whether companies explicitly specify a preference for

Filipino workers, the fact remains that a vast majority of oil

and gas projects in the Middle East and Asia are manned by

Filipinos.

We don’t see this demand diminishing in the near future,despite the market downturn. In fact, we expect it to grow as a

number of upstream and petrochemical projects move into the

commissioning and construct ion phases.

Cabiles: Here in the Southpointe Industrial Park in

Southwestern Pennsylvania, where I work, at least four major

oil and gas players have established a strong presence – Range

Resources, Consol Energy, Noble Energy, and Rice Energy.

To me, this signals a significant and long-term commitment

of these companies to grow their businesses, which means they

will continue to need skilled oil and gas workers.

However, as the US economy is still in the recovery phase, and

many US citizens are available to meet the needs of the oil and

Mature markets in the

Middle East and Asia

continue to have a steady

demand for Filipino oil andgas professionals.

Filipinos stillin demand abroad

AOG | July · August 201510 I m a g

e f r o m i

S t o c k .





gas companies here, the demand for

overseas Filipino workers (OFWs)

may not come from the US.

Given the high interest shown

by other countr ies, the need for

Filipino oil and gas engineers may

come from countries, such as China

and Brazil, for example.

Why are OFWs in demand?Espiritu-Gaspar: Most Filipinos

are able to speak, read and write in

English at a working proficiency,

and are regarded as highly adapt-

able and resilient people.

During my experience at Air

Energi, the Filipinos I have worked with have shown great abil-

ity to integrate and work well with colleagues and managers,

and are considered to be good team players.

A large number of Filipinos are also family-oriented people

and their main priority is bettering the lives of their family.

Therefore, they are known to have a st rong work ethic and to be

flexible in adapting to various locations, including offshore.

Cabiles: Filipino workers are in demand in most sectors all

over the world. It is because of their skills and professionalism

that they have demonstrated over the years.

Therefore, if other countries would need oil and gas techni-

cal workers, they would consider, if not prioritize recruiting

Filipinos. Also, Filipino workers are very cost competitive,

making them more in demand.

Why is there a lack of job opportunities

within the Filipino energy sector?

Espiritu-Gaspar: The oil and gas sector in the Philippines is

not yet fully developed. Although new hydrocarbon reserveshave recently been discovered in the country, and a number of

companies have recently awarded contracts to local firms, the

industry is still emerging.

Because the Philippines is not

as mature as its Southeast Asian

neighbors, such as Indonesia

and Malaysia, better opportuni-

ties often exist elsewhere. And

although there is some demand

for engineers locally, experienced

Filipinos frequently choose to

work overseas due to higher earning

potential.In the Philippines, it is relatively

easy to hit the maximum tax rate

of 32%, whereas opportunities in other countries offer tax-free

packages or lesser tax regimes.

Cabiles: It may be that foreign firms have not yet considered

the Philippines as a substantial source for unconventional gas

or shale energy; hence, they have not yet aggressively estab-

lished a presence or operations there.

Which countries will look to employ Filipino

oil and gas professionals?

Espiritu-Gaspar: Mature markets in the Middle East, such

as Abu Dhabi, Qatar and Saudi Arabia and those in Asia,

such as Malaysia, Singapore and

South Korea will continue to

have a steady demand for Filipino

professionals.

We’ve also seen recent growth

in the deployment of Filipinos to

Africa and the Caspian region.

Even in regions where a local

workforce is in high demand,

there is still a requirement fortechnical workers from the

Philippines.

Cabiles: The US may not be one

of these countries, at least not for

the time being. Countries in the

Southeast Asian region closer

to the Philippines, like Malaysia and Indonesia, are the most

likely to need Filipino oil and gas professionals in the immedi-

ate future.

What kind of skills are in demand?

Espiritu-Gaspar: In terms of skill sets, many Filipino work-

ers fill design and engineering positions, andwork in piping, structural, electrical,

instrument and mechanical roles.

Additionally, Filipinos are often

sought to work in the project

services and controls divisions,

occupying planning, quantity

surveying, cost control and

procurement positions. We also

see a high demand for workers to

fill quality assurance inspection,

field construction and maintenance

positions.

Cabiles: Project management professionals, well opera-

tion engineers, and technicians, just to name a few. This is

especially true if they have experience in the unconventional

gas sector, since this is the booming industry, at least here in

the US.

There is a LinkedIn group called ‘Filipinos in Oil and Gas,’

which provides more insights. For example, glancing at the

group’s page, there is a post from Jason Brindisi, director at

WiseRecruit, mentioning that Kampac Oil from Dubai is plan-

ning to increase its investment in the Philippines.

Are OFWs in demand for

offshore or onshore work?

Espiritu-Gaspar: They are in high demand for both offshore

and onshore projects. In fact, if it wasn’t for some of the chal-

lenges associated with applying for work visas in certa in loca-

tions, I am confident that more Filipinos would be mobilized to

overseas locations.

Cabiles: I would have to say both offshore and onshore.

However, referencing again to a post by Brindisi, it seems like

offshore work is more common than onshore.

The oil and gas industry is very vertical, consisting of a

number of processes, such as the upstream, midstream, and

downstream sectors, and all of which are likely to require dif-

ferent labor force skill sets. AOG

Rowena Espiritu-Gaspar

Victor Cabiles

“Filipinos will most likely weigh

up the option of staying in

the Philippines where jobs

are lower paying, or working

overseas where there is higherearning potential.”

Rowena Espiritu-Gaspar





from 13 3/8-36in. It also retrieves subsea wells with 18 3/4in

high-pressure housing all in one trip and without using explo-

sive cutting devices. The M.O.S.T. system has a maximum pullcapacity of 181,437kg and a maximum lift capacity of 90,718kg.

Deployment

The M.O.S.T. system is deployed on drill pipe from a semi-

submersible rig and is simply lowered into position as part of

the BHA. Moving the mandrel body upward mechanically acti-

vates three grapple arms that close and latch onto the external

profile of the wellhead high-pressure housing.

The arms can be customized to match a range of wellhead

models from different manufacturers, even wellheads that

deviate from the standard 18 3/4in design. The mandrel then

rotates into the locked position inside the grapple housing. The

latch and unlatch of the arms and the rotation of the mandrel body can be confirmed visually using a remotely operated ve-

hicle (ROV) on the seabed.

Once latched onto the wellhead housing, the M.O.S.T. system

prevents the wellhead from turning or tilting, which enhances

stability throughout cutting and retrieval operations.

Unlike an internal latch mechanism, which risks damaging the

critical internal seals within the high pressure housing and ren-

dering the wellhead unusable for future operations, the grapple

arms on the M.O.S.T. system never contacts the internal seals.

This eliminates intervention that would ordinarily be re-

quired to recycle the wellhead if it can be salvaged at all.

Additionally, the external latch provides the necessary well-

head support to eliminate lateral whipping that can damageequipment and impede cutting.

Another advantage of latching the M.O.S.T. system onto the

external profile of the wellhead high pressure housing is the

larger ID flow area. The design of the M.O.S.T. system provides

greater clearance that enables cuttings from the inner and outer

casing strings to flow out of the ports and away from the working

mechanism, which prevents swarf buildup.

Cutting options

The M.O.S.T. system offers three cutting modes, such as com-

pression cut with a mud motor; tension cut with a mud motor;

and compression cut with a marine swivel (top drive rotary).

Suited for deepwater and high currents, the compression cut

I

ncreasing energy demand has expanded exploration and pro-

duction activities to nearly every corner of the world, regard-

less of environmental complexitiesIn response, operators have invested substantially in deepwa-

ter field developments, and today, a large number of deepwater

wells are recovering hydrocarbons f rom greater depths.

However, over time as these reservoirs reach their economic

limit, infrastructures in operation will eventually become idle

and cost significantly for daily maintenance.

When deepwater wells shift from asset to liability, plugging

and abandonment (P&A) is the next step. P&A is a major ex-

pense without return on investment and it can cost mill ions of

dollars per well. Besides the risk of damaging well components

that could be reused, P&A operations also inherent safety and

environmental risks. To mitigate the expected high costs and

potential hazards, dismantling deepwater wells require expe-rienced personnel, highly advanced technology and carefully

planned execution.

Challenges

When constructing deepwater wells, operators have pushed the

boundaries to tap into deeper reservoirs and drill more high-

pressure, hight-temperature (HPHT) wells.

To accommodate these environments, operators are increas-

ingly running thicker, heavier casing, typically 22in x 36in,

while the industry standard 18 3/4in wellhead inner diameter

(ID) has remained the same. This results in challenges when

cutting casing and retr ieving subsea wellheads during P&A.

The restrictions on the wellhead ID prevent using tools withlarge outer diameters (OD) in the cutting bottom hole assembly

(BHA), which reduces cutting stabilization. With no centralizer

on the inner casing string, the cutt ing BHA and inner casing

can bounce vigorously, as the outer casing st ring is cut.

M.O.S.T.

Weatherford has developed a technology that improves P&A

efficiency, reduces risks, and overcomes the challenges associ-

ated with cutting thicker, heavier casing strings and retrieving

subsea wellheads.

With no depth, pressure or temperature restrictions, the

Mechanical Outside-Latch Single Trip (M.O.S.T.) system cuts

and recovers multiple cemented and uncemented casing st rings

Weatherford’s Cham Soon Hoe and Aung

Din explain how operators in Vietnam and

Australia have benefited from the Mechanical

Outside-Latch Single Trip (M.O.S.T.) system

during subsea well abandonments.

Making the most

of M.O.S.T.

M.O.S.T. system Photos from Weatherford.





and tension cut modes use a down hole mud motor to rotate theknives, as the inner and outer casing strings are cut.

By eliminating the need to rotate the cutting BHA from the rig

the M.O.S.T. system can operate at greater depths and in stron-

ger currents. Suited for shallower waters and lower currents,

the compression cut top drive rotary mode incorporates an

additional tool. The marine swivel, which lands on top of the

M.O.S.T. system assembly, rotates the drill string and cutter

simultaneously to cut the casing strings.

By eliminating the need for explosive cutting devices and

environmental hazards from multiple detonations, the M.O.S.T.

system improves safety and efficiency. Shaped charges may not

completely sever casing on the first attempt and may require a

second blast.By contrast the M.O.S.T. system achieves complete separa-

tion by simply pulling up on the tool once the cut is made. The

entire assembly can then be pulled through the moonpool and

placed on the rig floor.

Vietnam case study

Another problem that operators encounter during the abandon-

ment of deepwater wells is side loading on the cutting str ing.

An operator in Vietnam used the tension cut M.O.S.T. system to

cut and pull cemented 22in x 36in casing strings in 292m of water.

Strong currents made it impossible to maintain a semisub-

mersible rig directly above the wellhead. The off center rig place-

ment pushed the cutting string extending from the rig to thewellhead to one side, which generated lateral force on the st ring.

A major advantage of using the mud motor for this applica-

tion is that it minimizes the effects of side loading. By placing

the portion of the cutting str ing that is exposed to the open sea

above the motor, the string remains stationary at all times.

The M.O.S.T. system eliminates the requirement to rotate the

entire string as casing is cut and improves cutting performance

in these harsh conditions. The entire operation, which usually

averages between 8-12 hours, took only five hours.

By reducing the amount of rig time by at least three hours,

the minimum cost saving for the operator was US$120,000.

Additionally, the cutting BHA had minimal damage and the well-

head could be reused without incurring significant repair costs.

Australia case study

An operator in Australia deployed the tension cut M.O.S.T.

system to cut and pull uncemented 20in x 30in casing strings

in 291m of water. Without the support of cement and a cen-

tralizer on the inner casing string, the operator anticipated

severe vibration once cutting began, which could damage the

knives and require extra trips down hole to cut and pull the

outer casing string. Cutting the inner and outer casing strings

began at a depth of 958ft (292m). These parameters included a

flow rate of 1741 L/min and the application of 1650 psi.

To minimize vibration of the inner casing string, pressure

was monitored and controlled. Once the maximum pressure

was obtained, the flow rate of water pumping through the BHA

string was maintained to keep the pressure constant. Both the casing str ings and wellhead were removed in a

single trip with minimal damage to the 39in sweep knives. The

operator avoided nonproductive time (NPT) by eliminating the

need for a second trip. By using the M.O.S.T. tool transporta-

tion skid, it enabled the equipment to be delivered to the well

site preassembled and ready to deployed. The M.O.S.T. system

saved two hours of rig makeup and lay down time valued at

approximately $65,000. No safety or environmental incidents

were recorded and the entire operation took 8.5 hours. AOG

Aung Din is a region sales manager for

fishing and well abandonment services at

Weatherford. He holds a mechanicalengineering degree from the National

University of Singapore and has spent over

10 years working in the oil and gas sector.

Cham Soon Hoe is Weatherford’s regional

operations manager for fishing and re-entry

services with over 10 years experience in

running fishing tools and well abandonment

projects. He holds a degree in petroleum

engineering from the University Technology

of Malaysia.

Weatherford P&A operations in Vietnam. Cutting and pulling uncemented 20in x

30in casing strings.

Wellhead retrieval with M.O.S.T. tool.





CNOOC’s LNG-powered tugboat. Photo from Rolls Royce.

“Qatar’s LNG accounts for 80% of all LNG exports to Asia.

Japan, South Korea, India and China a re the main importers of

Qatar’s LNG. Japan is Qatar’s largest market followed by South

Korea and India,” Salameh explains.

At present there is a combined 52 Bcm/a of Qatari LNG con-

tracts in place with Asian buyers, which is close to 50% of over-

all Qatari production, points out Nayem Chowdhury, analyst at

Bentek Energy, an analytics and forecasting unit of Platts.

“Largest share accounting to 35 Bcm/a is held with India, Japan and South Korea, with each of these nations cont ract ing

11-12 Bcm/a of LNG from Qatar,” Chowdhury says.

“However, this number drops by 10 Bcm/a in 2022, as 10

Qatari contracts with Japanese buyers come to an end the

preceding year 2021, and a further 7 Bcm/a contract with South

Korea also comes to an end by 2023.”

US, Australia impact

While Salameh is determined that Qatar will continue to be

one of the world’s largest producers and exporters of LNG well

into the future, he also thinks Austra lia could overtake them to

become the largest LNG exporter by 2020.

LNG exports from the US and Australia could seriouslycompete with Qatar LNG exports to Asian countries, Salameh

says.

“Australia is the biggest rival in the Asian market and will

likely continue to be so,” he says. “In 2014, Qatar exported 77.4

million ton of LNG, while Australia exported 20.8 million ton.

“Against Qatar’s 77 million ton of production capacity,

Australia will have 85 million ton by the end of this decade.

And by the mid 2020s, the US may have built a production

capacity of 50 million tonne or more, and Canada would have

added another 35-50 million tonne,” he says.

The commencement of US exports will also add length to the

market and downward pressure on European hubs, as well as

Asian LNG spot prices.Chowdhury says as nearly 25% of Qatari volume is not con-

tracted as of 2015, this will impact the price they can achieve

for their cargoes. “However, we expect Qatari production to

remain robust, as their cost of production remains very low.”

While Qatar’s main advantage is its geographical loca-

tion between main markets in Asia and Europe,

its disadvantage is its long distance

from East Asian buyers rela-

tive to Australia.

“Nonetheless, Australia is

a much higher cost producer

than Qatar and doesn’t act

strategically, since its LNG

Although Qatar is the largest exporter of liquefiednatural gas (LNG), accounting for 32% of global LNG

exports, its dominance could be challenged by the US,

Australia and Iran.

Accounting for 55% of the country’s gross domestic product

(GDP), Qatar’s economy heavily relies on its energy sector with

most of its revenue generated from selling LNG.

Its state-owned enterprise Qatar Petroleum (QP) and its sub-

sidiaries run much of Qatar’s oil and gas industry. QP has 14

LNG trains with a total production capacity of 77 MTPA, and

RasGas and Qatargas operate seven LNG trains each.

The Qatargas consortium includes QP, Total, ExxonMobil,

Mitsui, Marubeni, ConocoPhillips and Shell, while QP and

ExxonMobil own RasGas.Qatar has the third largest natural gas reserves in the world

amounting to 24.5 Tcm and the lowest production costs of LNG

in the globe, says Dr. Mamdouh Salameh,

an international oil economist and con-

sultant to the World Bank.

With more competitors entering

the global gas market, Qatar’s LNG

exports to Asia could be further

tested. Audrey Raj reports.

Qatar LNGchallenged

Laffan Refinery.





industry is split between many different companies,” Salameh

adds.

“Qatari LNG will continue to be very profitable, but prices

will decline and it won’t be able to be the swing producer or

strategic player anymore.”

Plunging global oil prices, Salameh says, may turn hopes for

cheap LNG supplies from the US into a costly disappointment

for Asian buyers who have already invested billions of dollars

in long-term contracts.“The 54% price slide since June 2014 to US$60/bbl exposes

cracks in the assumption by Japan, India and other Asian buy-

ers that cheap US LNG would muscle into high value Asian

energy markets from 2016,” he says.

“The oil price drop has also raised the possibility that some

US Gulf Coast LNG export plants may be mothballed before

they ever get a chance to supply world markets.”

Iran nuclear deal

Iran’s final nuclear deal would mean internat ional oil and

gas majors can now invest in Iranian exploration, plus import

technologies needed to develop the country’s vast amount of

hydrocarbon reserves.However, given current market conditions only limited inter-

national investments will likely be available to help increase

Iran’s production.

“At today’s low oil and gas prices, investors are cutting back

everywhere. The terms offered by Iran must be so remunerative,

so as to entice foreign investors back into Iran,” Salameh says.

“However, with technology and investments Iran could sub-

stantially raise its natural gas production, and export sizeable

amounts to Europe and the Asia-Pacific region in the form of

natural gas and LNG, competing directly with Russian gas sup-

plies to Europe and Qatar’s LNG exports to Asia.”

Asian buyers

The Global Liquefied Natural Gas (LNG) Market Assessment by

Frost and Sullivan found that demand from emerging Asian

countries fuels global LNG imports.

According to the report, the market had a supply of 32.42

Bcf/d in 2014 and estimates this to reach 69.26 Bcf/d in 2025,

with LNG demand from Asia projected to be 23 Bcf/d by 2025.

Asian LNG demand is expected to grow at a rate of 5% per

annum from 2014-2025, and Chowdhury says this will be par-

ticularly driven by China and India.

“We expect their combined imports to double reaching just

above 90 Bcm/a between 2014-2020. India could receive up to 8

Bcm/a of US LNG starting mid 2017.

“We also expect a six-fold increase in LNG demand at the

newer importing nations like Indonesia, Malaysia, Pakistan,

Singapore and Thailand in the next ten years,” Chowdhury says.

While demand is likely to rise further supported by lower

prices, Qatar’s ability to maintain its pricing advantage will

be challenged, as these markets benefit from new supplies and

better deals.

“Contract terms for LNG buyers are changing too,” Salameh

says. “Until recently, LNG was mostly supplied under rigid

conditions set out by major gas companies, and buyers wouldtypically have to commit to 20-year contracts.

“As market dynamics have changed in buyers’ favor, they are

opting for shorter term contracts and pricing arrangements are

becoming more flexible as well,” he says.

“Today, buyers have a choice. They can buy LNG at an oil-linked

price, Henry Hub-linked price or European gas-based price.

“Buyers in China, Japan and South Korea are already using the

prospect of LNG shipments from the US, as leverage in seeking

lower prices and better terms from sellers, such as Russia.

“The Chinese are likely to be looking to squeeze even better

price out of the Russians,” Salameh says.

Qatar’s responseThe Qatari government has suspended construction of new LNG

plants, as well as put a moratorium on further development of

the North field, restricting annual production to 77 MTPA.

“That creates an opening for competing nations. Qatar could

add another 12 MTPA of capacity by debottlenecking its existing

plants, and the North field has ample reserves,” Salameh says.

“However, Qatar seems in no hurry to launch new projects.

Its response has been buying up the competition.

“For example, Qatar Petroleum International (QPI) bought

stakes in gas and oil fields in Brazil, Canada and the Republic

of Congo since April 2013,” he adds.

“QPI also owns 70% stake in Houston-based Golden Pass

Products, a joint venture with ExxonMobil that operates theLNG import terminal in Sabine Pass in Texas.

“It is also seeking final permission from the US Energy

Department to add an export terminal to the existing import

terminal,” he says.

In addition, the foreign investment arm of the sovereign wealth

fund, has also taken stakes in Royal Dutch Shell and France’s

Total, both of which operate LNG plants around the world.

Salameh says, “Qatar’s LNG exports will continue to be enor-

mously lucrative with the lowest production costs in the world

and enormous volumes of petroleum.

“But if it is not going to expand capacity further, it does not

have the strategic ability to deter competitors. There is a lot of

new competition coming up.” AOG

Halul offshore platform. Qatargas LNG ship. Photos from Qatargas.





“Our stepped up presence in large liftboats demonstrates

increasing market acceptance and growing demand for these

type of vessels,” Chan says.

Fabricating the 450ft-long lattice legs is a major engineering

feat for TRIYARDS, as they need to be sturdy enough to with-

stand powerful winds and ocean currents to ensure the safety

of 250 crewmembers onboard.

The vessel’s hull is fabricated in sections and interfaced with

key pieces of equipment, including the thruster, jacking sys-

tem, generator, HVAC system and electrical system.

“Apart from the usual fabrication work, we also have to meticu-

lously select the appropriate steel to design and develop suitable

legs for the BH 450,” says yard general manager, Jeffery Ong.

Offshore vessel fabrication and engineering solutionsprovider TRIYARDS achieved yet another milestonewith the delivery of its second BH 450 liftboat. TheABS-classed BH 450 is the group’s first fabricated lattice leg lif t-

boat standing at more than 450ft, capable of operat ing in water

depths up to 105m.

Designed by Lousiana-based A.K. Suda Ltd., BH 450 is athree-legged, self-elevating, self-propelled general service

workboat suitable for operations in the North Sea.

The company’s CEO Chan Eng Yew says these liftboats

account for more than 70% of the group’s revenue with each

worth approximately US$90 million.

“The BH 450 showcases TRIYARDS’ superior design, en-

gineering, fabrication and project management capabilities,

because it is one of the world’s tallest lif tboats,” Chan says.

“We delivered our first BH 450 mid last year and the second

unit was delivered this year to Southeast Asia-based operators.

“Since then, we have also bagged orders worth $175 million

to construct our third and fourth BH 450 units, currently under

construction in our Vietnam yards.

Ho Chi Minh City yard.

Singapore-headquartered TRIYARDS

continues to expand its fabrication

expertise. Audrey Raj explains.

Fabricationscales new heights

Liftboat hull fabrication.Photos from TRIYARDS.





“As a result, extreme precision is needed to construct the

latticed legs. For example, heat distortion has to be minimizedduring fabrication and welding.

“We also use laser equipment to measure the dimensions and

tolerance levels of the legs at every step of the construct ion pro-

cess. Even the jacking system has to be ca refully tested using a

full load that is lifted 105m high,” Ong explains.

Fabrication expertise

In addition to liftboats, TRIYARDS also fabricates floating

production, storage and offloading (FPSO) vessels, platform

jackets, catenary anchor leg mooring (CALM) buoys, heavy-

duty offshore crane structures and large A-frames.

End users who have deployed the firm’s units include inter-

national oil majors, such as PETRONAS, Chevron Thailand,Brunei Shell Petroleum, ExxonMobil Nigeria and Pertamina.

Most recently, in March, the group secured a fabrication

project from London Marine Consultants (LMC) to supply an

external turret mooring system for the FPSO vessel destined for

the Petrobras-operated Libra field offshore Brazil.

LMC will carry out the engineering, procurement and

construction of the external cantilever turret, which will be

fabricated at the TRIYARDS shipyards.

After which, the turret will be integrated with the Navion

Norvegia FPSO at Jurong Shipyard where the Navion Norvegia

shuttle tanker is being converted to form the Libra extended

well test FPSO for OOGTK Libra GmbH & Co KG.

TRIYARDS has also completed other turret fabrication jobsfor FPSOs, such as Perisai Kamelia and LMC FSO Salamander

in the past, Chan says. “Our works for these vessels have been

audited by oil majors like Hess and Total.”

Since the group’s acquisition of aluminium shipbuilders,

Strategic Marine (S) and Strategic Marine (V), TRIYARDS has

added both new fabrication capacity, as well as engineering

capabilities in aluminium too.

“Strategic Marine has built fast military craft and other com-

mercial vessels, plus aluminium helidecks and gangways for

the marine industry,” Chan says. “With them under our belts, we

not only have an extended client base, but have also become one of

the few yards in Asia with capabilities in both steel and alumini-

um shipbuilding and fabrication.”

Vietnam yards

Focused on shipbuilding, ship conversion, medium-to-heavyfabrication and ship repair, TRIYARDS owns fabrication yards

in Ho Chi Minh City and Vung Tau in Vietnam, as well as de-

sign and engineering facilities in Houston and Singapore.

The three main yards for heavy fabrication work, Ong says,

are fully equipped to handle a wide range of design and engi-

neering projects, vessel conversions and ship repairs.

Furnished with heavy-lift gantry cranes and deepwater

berths, these Vietnamese shipyards can undertake large scale

projects to fabricate dif ferent components of fixed platforms, as

well as vessel constructions.

The facility located in Ho Chi Minh City boasts 100,000sq m

in size with 50,000sq m of covered fabrication space; while the

two yards in Vung Tau are collectively 350,000 sq m big withapproximately 120,000sq m workshop space.

Its design and engineering facility in Houston produces

equipment, such as cranes, A-frames and winches, which are

installed on the self-elevating units and offshore support and

construction vessels fabricated at the yards.

The close proximity of the two yards in Vung Tau, such as

the TRIYARDS Vung Tau and Strategic Marine Vung Tau, Chan

says, has enhanced the team’s operational efficiency.

“For meeting international standards in quality assur-

ance, occupational health and safety and business continuity

management, our facilities won cert ifications, such as ISO

22301:2012,” he highlights.

“These credentials have strengthened our competitive edge, boosting our efforts to establish TRIYARDS as a fabricator for

the global offshore and marine industries.

“Our offshore expertise also extends to construction vessels, as

well as other offshore support watercraft, including anchor han-

dling tug supply vessels and platform supply vessels,” Ong adds.

“One to note is the construction of Lewek Constellation

for EMAS AMC. We delivered the vessel on time and within

budget from our Vietnam yards, which represented another

milestone for TRIYARDS.”

Lewek Constellation is a multi-lay offshore construction ves-

sel with ultra deepwater pipelay and heavy lift capabilities. It is

equipped with an ice-classed hull capable of transiting through

0.8m of ice and a technologically advanced DP3 system. AOG

BH 450 liftboat.

Vietnam yard workers.




18/32

“We were awarded the Zawtika EPCIC project in May last

year,” Chen says. “It has been a significant milestone for us, as

we get to work closely with Southeast Asian oil companies.

“It has helped us with our overall improvement as an EPCIcontractor, plus provided the opportunity to further expand

into international markets outside of China,” Chen adds.

Scheduled for completion in April 2016, Zawtika EPCIC

involves two stages – onshore construction and offshore installa-

tion. Since it’s the group’s first EPCIC work in international wa-

ters, Chen says they experienced some first-of-its-kind challenges.

Zawtika EPCIC

International procurement and scheduling were some of the dif-

ficulties faced during the initial stages of onshore construction.

In order to procure materials and equipment required for the

job, COOEC had to collaborate with international manufactur-

ers from the company’s approved vendor list (AVL).“This was a challenge for us,” Chen says. “Since we haven’t had

prior relationship with these overseas manufacturers, it was a

E

xecution of the Zawtika phase 1B engineering, procure-

ment, construction, installation and commissioning

(EPCIC) project is well underway, says Offshore Oil

Engineering Co. (COOEC).Headquartered in Tianjin, China, COOEC is a Shanghai Stock

Exchange-listed, wholly-owned subsidiary of Chinese oil major,

China National Offshore Oil Corp. (CNOOC).

The Zawtika EPCIC includes four wellhead platforms, three

20 and one 12-well slots, four associated pipelines, brown field

modification of existing platform and telecommunications inte-

gration in the Zawtika field.

Awarded by Thai operator PTT Exploration and Production

(PTTEP), Zawtika development is located in blocks M9 and M11

in the Gulf of Martaban, offshore Myanmar.

According to project control manager, Liu Chen, Zawtika

phase 1B is the first international EPCIC project for the

group and this has helped to strengthen their position in theSoutheast Asian market.

Audrey Raj speaks with COOEC about

the group’s fi rst international EPCIC

project challenges and more.

COOEC goes

international

Tanggu fabrication yard Photos from COOEC

Lanjing vessel

aogdigital.com AOG | July · August 201518Content is copyright protected and provided for personal use only - not for reproduction or retransmission.



19/3219aogdigital.com July · August | AOG

challenge for us to control cost and timely delivery of the products.

“As a result, to run the project smoothly, COOEC formed a

11-person Zawtika project procurement team to focus simply

on international purchasing.“Moreover, to ensure the quality of the procured materials

and keep track of deliveries, we also hired several experienced

international purchasing exper ts to work alongside these

manufacturers for acceptance check,” Chen continues.

While the detailed engineering star ted in July 2014, the on-

shore construct ion kicked off December 2014.

Due to this tight schedule and strict engineering require-

ments, COOEC had to transfer another 150 personnel from its

technical department to work with the project management

and procurement teams.

“More man power allowed for a even smoother work flow and

on schedule onshore construction, which is at its final stages,

preparing for offshore installation in October,” Chen says.“Here, too, we will experience challenges due to adverse

weather conditions and tight scheduling. Myanmar is a

typhoon-prone sea area and offshore construction is not al-

lowed during this time.

“So, we have to complete the job in less than five months or

else it will result in a delay. To overcome this challenge, we

have planned to use all our leading vessels for the installation

phase, including Lanjing and HYSY 289 ,” Chen says.

FPSO, Kenli 10-1 EPC

In May, COOEC won an engineering, procurement and con-

struction (EPC) contract for two 300,000 dwt FPSO vessels, by

TUPI BV, owned by Petrobras.“This project was originally contracted to Integra. Due

to some problems, we were asked to take over the job,” says

deputy manager of project management, Zhai Chao.

“Integra completed the engineering work for one FPSO and the

second one still requires some work. We will complete that engi-

neering bit and start on procurement and constructions stages.

“Scheduled for completion in December 2017, this is our first

international FPSO EPC contract with Petrobras. We believe this

will open up expansion into the South American market as well.”

On the local front, COOEC recently completed the EPC for

CNOOC’s Kenli 10-1 oil field involving three platforms, four

subsea pipelines and two submarine cables.

Located in the South of Bohai, in approximately 17m water

depth, the main production facilities of this oilfield include

one central processing platform, two wellhead platforms and

70 producing wells.

Though there are currently 12 wells producing approxi-mately 10,750 bo/d, operator CNOOC expects this to peak at

36,000 b/d in 2016.

COOEC

Employing over 8000 personnel, COOEC operates three yards

that collectively cover a total area of 3.5 million sq m, located

in Tanggu of Tianjin Municipality, Qingdao of Shandong

Province and Zhuhai of Guangdong Province.

“Our large scale shallow and deepwater engineering projects

are executed in these yards. We also own a diversified offshore

construction fleet consisting of over 20 vessels,” Chao says.

Notable ones include the 3000m deepwater pipelay and

hoisting vessel HYSY 201, the vessel Blue Whale with hoistingcapacity of 7500 ton and the semisubmersible self-propelled

engineering ship HYSY 278 .

In July, HYSY 278 completed module floatover installation

for the CKX project at the Cakerawala gas field in the Gulf of

Thailand, approximately 150km northeast to Kota Bharu in

Malaysia.

A joint operation by COOEC and Dockwise Shipping, it was

HYSY 278 ’s second floatover installation, following the Enping

25 module in 2014.

“Other type of vessels we own consist of a 50,000 ton semi-

submersible self-propelled vessel, a 3000m deepwater multi

function underwater engineering vessel, a deepwater installa-

tion vessel and deepwater trenching vessel,” Chao says.After being in operation for more than four decades, Chao says,

the firm now specializes in eight essential offshore services.

These comprise of engineering design, engineering construction,

engineering installation, field maintenance, underwater engineer-

ing inspection and installation, skid mounted product manufac-

turing, offshore engineering inspection and EPC management.

“We also have an extended client base, and have previously

done projects for other international companies like Husky

Energy, Confield, Kerr-McGee, Technip, MODEC Offshore, Aker

Solutions and FLUOR,” Chao says.

“Moving forward, we hope to further expand our services in

Asia Pacific, as well as Afr ica, Canada, Europe and possibly the

Artic region.” AOG

Zawtika project. Zawtika project team.




20/3220 aogdigital.comAOG | July · August 2015

year and at the end of 2014 its GDP surpassed that of the US.

With a population of almost 1.4 billion people, China has be-

come the second largest economy.

According to the United Nations Environment Programme,

the use of fossil fuels by China’s rapidly growing population

has increased by more than sevenfold, growing annually at a

rate of 5.3%.

With the rapid growth rate in China’s economy, population,and consumption of energy resources, China is shift ing its fo-

cus to develop a National IPR Strategy Action Plan (IPR Action

Plan) to enhance its’ capacity to leverage its IPR in global

competition.

IPR, 2020 action plan

With the advancement of domestic technology and the imple-

mentation of the IPR Action Plan, Chinese enterprises are

developing strategic IP portfolios to equip them for competition

with international companies.

They are mining, protecting, and enforcing domestic

IPR against non-Chinese enterprises as an effective way

to stake their position in the global marketplace.To further develop its IPR Action Plan, China recent-

ly issued the Further Implementation of the National

IPR Strategy Action Plan 2014-2020 (2020 Action Plan).

The 2020 Action Plan identifies four objectives, such

as to promote IP creation and utilization; strengthen

IP protection; strengthen IP management; and expand

international IP cooperation.

Under the 2020 Action Plan, too, Chinese enterprises

are actively developing IP portfolios to protect IPR both

domestically and internationally.

Chinese vs foreign fi lings

Recent statistics from the State Intellectual PropertyOffice (SIPO), demonstrate the rapid increase in patent

filings by Chinese enterprises to protect their tech-

nology assets, as compared to their foreign industry

counterparts.

For example, Figure 1 shows the increase of patent

application filings at SIPO for both Chinese and foreign

enterprises from 2003-2014.

In 2014, over 2.36 million patent applications were

filed before SIPO (about 2.2 million being filed by

Chinese enterprises), as compared to approximately

300,000 patent applications filed in 2003.

In the past 11 years, the number of patent applica-

tions filed by Chinese enterprises has grown at an

With China’s focus on developing a national plan topromote economic and technological developmentthrough the protection and enforcement of intel-lectual property (IP) rights (IPR), non-Chinese enterprises must

understand the available forms of IP protection in the country.

According to the World Bank, since initiating market reforms in

1978, China has shifted from a centrally planned to a market-based

economy, and has experienced rapid economic and social growth.

Since 2010, China’s GDP growth has averaged about 10% a

To remain competitivein the Chinese market,

foreign oil and gas

enterprises must protect

their intellectual property

rights in China, explain Brad

Chin and Kevin Tamm of

Bracewell & Giuliani LLP.

GEOGRAPHICAL FOCUS: CHINA

ProtectingIPR in China

2 00 3 2 00 4 2 0 05 2 0 0 6 2 00 7 2 00 8 20 0 9 2 0 10 2 01 1 2 01 2 2 01 3 2 01 4

By Chinese

By Foreigners

Total

0

0.5

1.0

1.5

2.0

2.5

M i l l i o n s

Patent applications filed in China

0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

M i l l i o n s

Patents granted in China

2 00 3 2 0 0 4 2 0 05 2 00 6 2 0 07 2 00 8 2 0 09 2 01 0 2 01 1 2 01 2 2 0 13 2 01 4

Chinese

Foreigners

Total

Fig. 2: Patents SIPO granted to domestic and foreign applicants.

Fig. 1: Patent applications filed before SIPO.




21/32

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filing of the complaint, compared to at least two years

in the US.

However, the adjudication of an action (for example, a

patent infringement case) in China is routinely delayed

for one to two years by a concurrent patent invalidity

challenge, which can only be conducted by SIPO.

In the US, a patent infr ingement case is less often

stayed pending a concurrent determination by the US

Patent & Trademark Office of a patent invalidity chal-lenge, than through a reexamination proceeding.

China’s recent move to strengthen IP protect ion by

enhancing speedy enforcement of IPR further shows

the importance for foreign enterprises to understand

IPR acquisition and enforcement.

In an attempt to answer criticism that it has been lax in IPR

protection, China, in 2014, established three specialized courts

in Beijing, Shanghai, and Guangzhou to handle IP cases.

Figure 3 shows the fast-growing number of patent infringe-

ment cases filed in Chinese civil courts by Chinese and foreign

patent holders.

Chinese civil courts entertained 9648 patent infringement

cases in 2014, a growth rate of 464%, as compared to only 2080 being filed in 2002. Similarly, patent right disputes are increasing

in the administrative track of the Chinese IP enforcement system.

For example, 4684 patent infringement cases were filed

before administrative agencies in 2013, more than double from

2012. Similar trends are observed in relation to the enforce-

ment of trademarks and copyrights in China.

Conclusion

These growth rates in patent filings (i.e., IPR protection) and

enforcement of IPR through administrative agencies and civil

court proceedings demonstrate that a foreign company seeking

to enter the Chinese market must select the most effective form

of IPR protection for its technology.In addition, understand the procedural advantages and chal-

lenges associated with the use of administrative act ions and

judicial proceedings to maintain an equal footing with Chinese

enterprises.

Non-Chinese firms must also develop relationships with

local Chinese industry partners and legal representatives, as

well as gain an understanding of the judicial requirements for

protecting their IPR in China. AOG

Brad Chin is a partner and the IP practice

group head at Bracewell & Giuliani LLP. He

has global IP practice with an emphasis on

patent protection and portfolio management for the US and international (China, South

Korea, Japan, and the Middle East) clients.

Chin is also a former US Patent & Trademark

Office Patent Examiner.

Kevin Tamm is a US registered patent

attorney practicing as an associate with

Bracewell & Giuliani LLP. He counsels clients

regarding patentability and intellectual

property asset management in the areas of

energy, oil and gas and petrochemicals.

average annual rate of 21.9%, as compared to 10.2% for foreign

enterprises.

Similarly, the number of patents granted by SIPO has increased

in the past decade, as indicated by Figure 2. In 2014, over 1.3

million patents were granted by SIPO and about 1.2 million of

which were granted to Chinese enterprises.

The number of patents granted to Chinese enterprises has in-

creased at an average annual rate of 21.9% in the last decade, ascompared to 13.6% for foreign enterprises. Similar trends are

observed in relation to the filing for protection of trademarks

and copyrights in China.

Chinese enterprises are also act ively enforcing their IPR

against other Chinese enterprises and foreign enterprises to

improve their position in the global marketplace.

IPR enforcement

China provides two primary mechanisms to enforce IPR, such

as administrat ive agencies and judicial proceedings (i.e., civil

or criminal actions).

Provincial or city-level IP offices govern administrative IPR

enforcement. In an administrative procedure, a complainantmust provide some prima facie evidence of infringement to the

local agency.

Remedies include, for example, destruction of an infringing

product and/or the tooling to produce the infringing product,

asian oil and gas-july-august 2015

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