business opportunities in offshore, oil & gas in the usa

Business Opportunities in the USA’s Offshore Oil & Gas IndustryRegion Americas – USASeptember 2015

Crude Oil Prices & Offshore Technology

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Historical Front Month Crude Oil Futures Prices

Dollars per Barrel

Source: Short-Term Energy Outlook Market Prices and Uncertainty Report , U.S. Energy Information Agency, August 2015


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Sources: Shell Oil Company (Production Systems) and Gaffney Cline & Associates (Oil Prices), 17 November 2014

Offshore technology development takes the long view.


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Converted 1978 Aker H-3 in 1981 at Rauma Repola in 1981

Transocean Amirante

Transocean GSF Arctic III

Newbuild at Rauma Repola in 1984

PI-Rauma Engineering Development of the SPAR

Finnish offshore capabilities were positioned to take advantage of new technology development in the previous major petroleum industry boom-bust cycle.

U.S. Oil Demand & Offshore Resources

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Source: Annual Energy Outlook 2015, U.S. Energy Information Agency, 14 April 2015

Primary U.S. Energy Consumption by Fuel: 1980-2040

U.S. consumption of petroleum / other liquids increases from 19.0 million bbl/d in 2013 to 19.6 million bbl/d in 2020, then declines to 19.3 million bbl/d in 2040.


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Present & Future U.S. Crude Oil Reserves

Source: Independent Petroleum Producers Association, April 2015

See: http://breakingenergy.com/2014/04/08/gulf-of-mexico-to-drive-global-deep-water-drilling-innovation/

http://breakingenergy.com/2014/04/08/gulf-of-mexico-to-drive-global-deep-water-drilling-innovation/


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Western & Eastern Gulf of Mexico are the primary areas for U.S. Outer Continental Shelf (OCS) leasing during the next five years.

Source: Bureau of Ocean Energy Management (BOEM), U.S. Department of Interior

See: http://www.boem.gov/five-year-program-2017-2022/


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U.S. Offshore Leasing, Exploration & Development Process Timeline

Source: American Petroleum Institute, 2013

Deepwater Trend & Project Economics

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Break-even Prices for Non-producing Petroleum Assets

(USD/bbl)

Source: “Deepwater Oil - Huge Growth Potential”, Seeking Alpha, 3 June 2015

As demand grows and conventional supply decreases, the world will turn towards deepwater drilling for increased oil production.

Offshore Moving to Deeper Waters


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Deepwater & Ultra-deep Water Depths


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Proven & Unproven Global Deepwater Reserves

Primary Source: Baker Hughes

See: http://seekingalpha.com/article/3231866-deepwater-oil-huge-growth-potential

Offshore Success Ratios

Source: American Petroleum Institute


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U.S. Gulf of Mexico Production, Transportation & Refining Infrastructure

U.S. Gulf of Mexico has advantages over much of the rest of the world due to the combination of geology, commercial potential of discoveries and the existing offshore oil & gas industry infrastructure.*

Source: U.S. Energy Information Agency (EIA)

*See: “Gulf of Mexico to Drive Global Deep-Water Drilling Innovation”, Breaking Energy, 8 April 2014


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Deepwater Field Development Period in Years

…big challenge of deepwater projects is [capital intensity] and technological complexity, which combined, [results] in longer payout periods…operators in North America are more efficient –averaging five years to production after discovery.

Source: “Deepwater Oil - Huge Growth Potential”, Seeking Alpha, 3 June 2015


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U.S. Federal Waters Monthly Oil Production: 2010 – 2016

Million Barrels per Day

57

17

30

48

13

35

0 10 20 30 40 50 60

2010-2014

2015-2019

Percentage of Producing Fields in U.S. Gulf of Mexico: 2010-2019

Ultra-deepwater Deepwater Shallow Water

Source: Offshore, 9 June 2015

Existing Production

New Field Production

Source: U.S. Energy Information Agency, 3 March 2015

Offshore Projects Overview

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Gulf of Mexico Deepwater Frontier Exploration and Production Timeline

Individual Prospect:

5,000' Water Depth, 30,000' Drilling Depth

Source: American Petroleum Institute


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Operators*Support & Services

Primary Contractors & Consultants • Catering / FacilityManagement

• Sea / Air Transport

• Warehouse / Logistics

• Communications

• Recruitment

• Health, Safety & Environmental Services

• Medical Services

• Banking/Finance

• Legal

• Insurance

• Accounting

• Energy Consultants

Reservoirs Wells Facilities Marine/Subsea

• Reservoir Engineering Consultants

• Seismic Data Consultants

• Well Engineering Consultants

• Drilling Contractors• Cement Contractors• Well Servicing

Contractors

• Engineering Consultants • Front-end Engineering &

Design (FEED) Firms• Engineering,

Procurement & Construction (EPC) Contractors

• Marine/SubseaContractors

• Heavy Lift Contractors• Pipelay Contractors• Floating Production

Storage Units

Service & Supply Contractors; Equipment & Services Subcontractors

• Geoscience Consultants• Data Interpretation

Consultants• Seismic Instrumentation• Data Storage• IT Hardware / Software

• Drilling & Well Equipment Manufacturers

• Drilling Tubulars• Laboratory Services

• Machinery / PlantDesign & Manufacturing

• Engineering Subcontractors

• Inspection Services• Specialists Steel &

Tubular

• Subsea Manifold / Riser Design & Manufacture

• Marine / Subsea Equipment

• Subsea Inspection Services

Offshore Operating Ecosystem

* Operator can be any type of oil & gas exploration, development & production company, big or small.


Anadarko Petroleum Lucius Oil Field E&P Timeline

Date Milestone

09.2009 Exploration Plan filed with Bureau of Ocean Energy Management

10.2009 ENSCO 8500, an ultra-deepwater semisubmersible, spuds an exploration well

12.2009 Oil Discovery

01.2010 Positive Appraisal

05.2010 Flow Test confirms deliverability

08.2011 Anadarko issues LOI to Technip for engineering, construction & transport of Truss Spar hull

12.2011 Anadarko approves go ahead with Lucius development

12.2011 Mustang Engineering awarded topsides engineering, procurement & construction

O1.2012 FMC to supply subsea equipment

01.2012 Aker Solutions to supply umbilicals

04.2012 Technip awarded subsea design, fabrication and installation

05.2013 Truss Spar arrives in U.S. Gulf of Mexico from Pori, Finland

02.2014 Truss Spar installed at location

06.2014 Heerema Marine Contractors install topsides

01.2015 First production from Lucius Field

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Offshore Oilfield Marine Asset Demand

Exploration Development Production Decommissioning

Period 1-3 years 2-4 years 5-50+ years Upon Depletion

Sensitivity to Oil Price

High Medium High oil price extends lifespan

High oil price defers decommissioning

Drilling & Production Assets Required

• Jack-up• Semi-

submersible• Drillship

• Jack-up• Drillship• Tension-leg

Platform (TLP)• Spar• FPSO

• Tension-leg Platform (TLP)

• Spar• FPSO• Semisubmersible

NA

Offshore Service Vessels Required

• Seismic Survey• Anchor

Handling• Supply• Crew Boat

• Anchor Handling• Supply• Diving Support• Construction

Support• Safety• Utility• Pipelay Barge• Heavy-lift Barge

• Anchor Handling• Supply• Construction

Support• Crew Boat• Safety• Utility• Fire-fighting• Well Intervention

• Anchor Handling• Supply• Diving Support• Construction Support• Utility• Flat-top Barge• Derrick Barge• Heavy Lift Barge

Source: Pareto Research

Mobile Offshore Drilling Unit Opportunities

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MODU Options

Water depth and mobile offshore drilling unit (MODU) availability determine if existing or retro-fit/newbuild unit is available or required, respectively.

NOTE: Jack-ups are the only units among the above fabricated in U.S. shipyards.


Ten-year End of day Commodity Futures Price Quotes for West Texas Intermediate (WTI)

NYMEX Crude Oil WTI

Current Globally Competitive Mobile Offshore Drilling Unit Utilization by Rig Type

Unit Type Utilization (Working/Total)

Jack-up 60.0% (263/438)

Semisubmersible 63.7% (109/171)

Drillship 72.5% (87/120)

Source: Rigzone, Friday, 4 September 2015

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Source: NASDAQ, 4 September 2015


Transocean Fleet DeploymentSelect Markets: 2015

U.S Gulf of Mexico

South America

West Africa Southeast Asia

Deepwater AsgardDeepwater ChampionDeepwater Discovery Deepwater InvictusDeepwater Nautilus Deepwater Pathfinder Development Driller IIIDiscoverer Americas Discoverer Clear Leader Discoverer Deep Seas Discoverer Entenrprise Discoverer IndiaDiscoverer Inspiration Discoverer Spirit GSF C.R. LuigsGSF Jack Rya

Deepwater NavigatorDhirubhai Deepwater KG1 Petrobras 10000 Sedco 706 Transocean Driller

GSF Rig 135Sedco Express Sedco 702

Deepwater FrontierGSF Constellation I M.G. Hulme, Jr.Transocean Andaman Transocean Siam DrillerTransocean Ao Thai

Transocean Management Ltd.Chemin de Blandonnet 10CH-1214 VernierSwitzerlandExecutive Management

Transocean 4 Greenway PlazaHouston, TX 77046Corporate

See: http://www.deepwater.com/fleet/overview 9/24/2015 © Finpro 21

0 2000 4000 6000 8000

Hercules Offshore

Atwood Oceanics

Rowan

Diamond Offshore

Noble

Ensco

Tranocean

Million USD

Top Offshore Drilling Company Revenue: 2011 & 2015 (Projected)

2015 2011

Source: Statista, 2015

Contacts with drilling companies in the U.S. Gulf of Mexico important, because major global contractors operate from the region.


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Ensco Fleet Deployment Noble Fleet Deployment

Ensco plc6 Chesterfield GardensLondon W1J 5BQUnited Kingdom

Ensco5847 San FelipeSuite 3300Houston, TX 77057

Noble Corporation plcDevonshire House1 Mayfair PlaceLondon W1J8AJ

Noble Drilling Services Inc.13135 South Dairy Ashford, Suite 800Sugar Land, TX 77478

Offshore Service Vessel Opportunities

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The current low oil price environment has resulted in reduced activity levels…For the OSV market in the Gulf, the glut of vessels is compounding the problem, and with over 30 newbuilds scheduled to enter the market in the next couple of years…For deepwater, big investments in expensive infrastructures and hard, performance-based leases make responses to low oil and gas prices much more moderate, at least in the short term.

“Down Time”, Workboat, 28 April 2015

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Source: The Maritime Executive, 27 October 2014

North American Emission Control Area (ECA)

US LNG Demand in 2029 –Vessel Operations

Source: American Natural Gas Alliance, October 2014

U.S. Gulf of Mexico

U.S. Environmental Protection Agency (EPA) actions driving OSV fleet change.


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See: http://harveygulf.com/green.html

Harvey Energy OSV Project Stakeholders:

• Shell Oil Company

• Harvey Gulf International

• Gulf Coast Shipyard Group

• Wärtsilä*

• Martin Energy (Fuel Supply)

• American Bureau of Shipping (Vessel Classification)

• US Coast Guard (ECA Enforcement)

Source: ABS Gas Solutions, 20 Feb 2015

Harvey Gulf International Marine became the first U.S. vessel operator to contract for construction of vessels capable of operating exclusively on natural gas.

*Dual-fuel diesel OSV was constructed by Gulf Coast Shipyard Group (GCSG) and is powered by three Wärtsilä 6L34DF dual-fuel gensets providing 7.5 MW of power that are supplied fuel via Wärtsilä’s LNGPac system.

Offshore Development Opportunities

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Top

sid

eH

ull/

Jack

et

Offshore Development/Production System Value Chain

Chevron Tahiti (Spar) Example

BP Atlantis (Semisubmersible) Example

Discovery 2002First Oil Production 2009

Discovery 1998First Oil Production 2007


US Gulf of Mexico Deepwater Discoveries: Development

Field Name Location DiscoveryYear

Water Depth (ft)

Operator Status Projected Onstream

Production Type

Amethyst Mississippi Canyon 26

2014 1122 Stone Energy Development 2016 Semisubmersible

Dantzier Mississippi Canyon 782

2013 6580 Noble Energy Development 2016 Semisubmersible

Gunflint Mississippi Canyon 948

2008 6100 Noble Energy Development 2016 Semisubmersible

Heidelberg Green Canyon 983

2009 5300 Anadarko Development 2016 Spar

Julia Walker Ridge 627

2007 7087 ExxonMobil Development 2016 Semisubmersible

Stampede –Knotty Head

Green Canyon 512

2005 3557 Hess Development 2016 TLP

Stampede –pony

Green Canyon 468

2005 3440 Hess Development 2016 TLP

Stones Walker Ridge 2005 9576 Shell Development 2016 FPSO

1 meter = 3.28084 feet Source: Offshore magazine, 15 January 2015

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Key to success is getting ahead of the development facilities procurement phase.


US Gulf of Mexico Deepwater Discoveries: Appraisal Phase


Water Depth (ft)


Production Type

Appomattox Mississippi Canyon 392

2010 7290 Shell Appraisal ? ?

Buckskin Keathley Canyon 872

2009 6920 Chevron Appraisal ? ?

Coronado Walker Ridge 98 2013 6127 Chevron Appraisal ? ?

Friesian Green Canyon 599

2006 3830 Freeport-McMoRan Appraisal ? ?

Gila Keathley Canyon 93

2013 4900 BP Appraisal ? ?

Guadalupe Keathley Canyon 10


Hadrian Keathley Canyon 919

2009 7425 ExxonMobil Appraisal ? ?

Healey Green Canyon 92

2007 2420 W&T Appraisal ? ?

Holstein Deep Green Canyon 643

2014 2890 Freeport-McMoRan Appraisal ? ?

Kaskida KeathleyCanyon 292


Katmal Green Canyon 40

2014 2100 Noble Energy Appraisal ? ?

1 meter = 3.28084 feet Source: Offshore magazine, 15 January 2015

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Water Depth (ft)


Production Type

La Femme Mississippi Canyon 427

2004 5800 Stone Energy Appraisal ? ?

Leon Keathley Canyon 642

2014 6i19 Repsol Appraisal ? ?

Logan Walker Ridge 969

2011 7750 Statoil Appraisal ? ?

Magellan East Breaks 424 2007 2800 Apache Appraisal ? ?

Moccasin Keathley Canyon 736


North Platte Garden Banks 959

2012 4871 Cobalt Appraisal ? ?

Phobos Sigsbee Escarpment 39

2013 8500 Anadarko Appraisal ? ?

Puma Green Canyon 821


Redrock Mississippi Canyon 204


Rydberg Mississippi Canyon 525


Samurai Green Canyon 432

2009 3400 Anadarko Appraisal ? ?

See: http://www.offshore-mag.com/content/dam/offshore/print-articles/volume-75/01/gom-deepwater.pdf

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http://www.offshore-mag.com/content/dam/offshore/print-articles/volume-75/01/gom-deepwater.pdf




Water Depth (ft)


Production Type

Shenandoah Walker Ridge 52 2009 5750 Anadarko Appraisal ? ?

Shiloh Desoto Canyon 269


Sturgis Atwater Valley 183


Tiber Keathley Canyon 102


Tiger Alaminos 818 2004 9004 Chevron Appraisal ? ?

Tortuga Mississippi Canyon 561/605


Troubadour Mississippi Canyon 699


Tucker Walker Ridge 543

2006 6778 Statoil Appraisal ? ?

Vicksburg DeSoto Canyon353


Vito Mississippi Canyon 984


Winter Garden Banks605

2009 3400 W&T Appraisal ? ?

Yucatan Walker Ridge 95 2013 5881 Shell Appraisal ? ?

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U.S. Offshore Industry Networking

Primary Value Chain Players – U.S. Offshore Gulf of Mexico

Drilling Contractors OSV Companies* Engineering Firms EPC Contractors Shipyards O&G** Companies

• Atwood Oceanics, Houston, TX

• Diamond Offshore, Houston, TX

• Ensco, Houston, TX• Helmerich &

Payne, Tulsa, Ok• Hercules Offshore,

Houston, TX• Nabors Ind. (USA),

Houston, TX• Noble Drilling Svs,

Sugar Land, TX• Parker Drilling Svs,

Houston, TX• Rowan Companies,

Houston, TX• Transocean Ltd.,

Houston, TX

• Bordelon Marine, Lockport, LA

• C&G Boats Golden Meadow, LA

• Edison Chouest Offshore, Galliano, LA

• Gulf Offshore Logistics, Mathews, LA

• Hornbeck Offshore Services, Mandeville, LA

• Otto Candies, Des Allemands, LA

• Tidewater Marine, New Orleans, LA

* OSV = Offshore Service Vessels

• Bechtel, Houston, TX

• SBM Atlantia, Houston, TX

• Wood Group Mustang, Houston,TX

• Aker Solutions, Houston, TX

• Allseas, Houston, TX

• INTECSEA, Houston, TX

• KBR, Houston, TX• McDermott,

Houston, TX• Kiewit Offshore,

Ingleside, TX• Saipem America,

Houston, TX• SBM Offshore

(Regional Center), Houston, TX

• Technip USA (HQ), Houston, TX

Mobile Offshore Drilling Units:• Keppel AmFELS,

Brownsville, TX• LeTourneau Yard,

Vicksburg, MS

• Apache• Anadarko• BP• Chevron USA• Cobalt• ExxonMobil• Freeport-

McMoRan• Noble Energy• Repsol• Stone • Shell Offshore• Statoil GOM• Stone Energy• W&T

** O&G = Oil & Gas

Major Facilities:• Harvey Gulf, New

Orleans, LA, & Gulfport, MS

• Eastern Shipbuilding, Panama City, FL

Oilfield Svc. & Supply

• Baker Hughes, Houston, TX

• Cameron, Houston, TX

• FMC, Houston, TX• Halliburton,

Houston, TX• National Oilwell

Varco, Houston, TX• Schlumberger,

Houston, TX• Weatherford

(USA), Houston, TX

Topside Fabrication:• Gulf Island,

Houma, LA• Gulf Island, Aransas

Pass, TX• Kiewit Offshore,

Ingleside, TX

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• Offer Timely Solutions• Select Sales Channel• Obtain Vendor Qualification

Key Industry Networking Events (2015 – 2015):• International Workboat Show, New Orleans, LA, December 1-3, 2015• Offshore Technology Conference, Houston, TX, 2-5 May, 2016

Conclusion

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World’s Liquid Surplus or Deficit & West Texas Intermediate (WTI) Crude Oil Price: 2003 - 2015

Source: Petroleum Truth Report, 3 April 2015

See: http://www.artberman.com/blog/