TDW Finishes Isolation Ops Offshore Malaysia

- TDW Finishes Isolation Ops Offshore Malaysia

Wednesday, August 24, 2011
TDW Offshore Services AS

TDW Offshore Services (TDW) has successfully completed a series of pipeline pressure isolation operations offshore western Borneo in Malaysia for Sarawak Shell Berhad. The operations were carried out on the Jintan, B11 and F6 platforms in the South China Sea, as part of Sarawak Shell Berhad's ongoing pipeline valves maintenance program.

Pipeline pressure safely isolated

The first of the three operations took place on the Jintan platform on a 24-inch gas export pipeline that extends from the JNDR-A platform to platform M1 off the West coast of Sarawak. TDW executed a double-block pressure isolation against 90 bar pipeline pressure so that Shell could safely replace a passing shut down valve (SDV). A 24-inch SmartPlug® isolation tool was pigged using production gas approximately 30 meters into the pipeline and set at the vertical section of the riser. Throughout the entire operation the SmartPlug tool was remotely operated, monitored and tracked continuously by TDW with its SmartTrack™ technology. The SmartTrack system, which uses proprietary electromagnetic and Extremely Low Frequency (ELF) technology, provides the operational security required to safely isolate pipelines in a wide range of operating environments. After the topside section was safely depressurized, a spool section was replaced and a new flange welded to it to accommodate the new shutdown valve. TDW utilized a joint tester tool to verify the flange installation prior to Shell installing the replacement SDV. Overall, the affected section was isolated for a period of 13 days at a pressure of 90 bar while necessary testing and SDV installation took place.

Passing motor-operated valves (MOVs) replaced at B11-A platform

On the second operation, a 32-inch SmartPlug isolation tool was utilized to replace two passing launcher motor-operated valves (MOVs) on a 32-inch gas export pipeline at the B11 platform that connects to the E11RB platform. By pigging in a SmartPlug tool with water over a distance of 50 meters and monitoring it with SmartTrack technology, TDW set the tool vertically in the riser and created a double-block isolation against the gas pressure. The SmartPlug tool remained in the riser for eight days at 102 bar to facilitate safe replacement of the MOVs.

One-month isolation facilitates replacement of MOVs and topside maintenance

The third operation also involved replacement of launcher MOVs on a 32-inch gas export pipeline that extends from the F6P-A platform to the E11 hub. This particular operation required TDW to utilize the SmartPlug system to successfully isolate the pipeline against 70 bar. The pipeline was isolated for 11 days for the replacement of defective MOVs and an extended duration for additional topside maintenance activities.

TDW carried out all three pressure isolation operations with SmartPlug tools that were custom-built at its headquarters in Stavanger, Norway. Local support was provided by TDW personnel based in Singapore and TDW's agent Amserve Engineering in Malaysia.

Reliable isolation services play pivotal role in pipeline maintenance

Since 2001, TDW has performed a number of pipeline pressure isolation operations to facilitate safe valve replacements on behalf of Sarawak Shell Berhad in Malaysia. "On behalf of Shell and the SKME2 team, I would like to thank TDW for their commitment and dedication to making sure that the isolation operations were executed with care and attention to detail," said Redzuan Zulkflie, Mechanical Static Engineer for Sarawak Shell Berhad.

"I am very proud of the isolation work that the TDW team carried out for Shell in Malaysia," said Rolf Gunnar Lie, Business Development Manager for TDW. "As a result of our joint efforts, TDW successfully isolated the designated sections of the pipeline network for safe execution of riser valve replacement. Had Shell been required to depressurize the long pipelines to replace the valves, it would have caused longer production downtime. It would also have been extremely costly, time-consuming and harmful to the environment had flaring taken place," he added.

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Petronas, Partners to Spend $5.05B to Develop Gas Offshore Malaysia

- Petronas, Partners to Spend $5.05B to Develop Gas Offshore Malaysia

Tuesday, August 23, 2011
Dow Jones Newswires
KUALA LUMPUR
by Ankur Relia

Malaysian state-owned oil and gas producer Petroliam Nasional Bhd. (Petronas) said Tuesday that it plans to spend MYR15 billion ($5.05 billion) with partners to develop marginal gas fields offshore Malaysia to meet growing demand in the country.

The project will likely encourage more investment in exploration activities that could lead to sizable discoveries offshore peninsular Malaysia, where subsidized prices have increased gas demand by 30% in recent years but have capped exploration and development.

"The development of the North Malay Basin project follows the recently introduced incentives by the government, particularly for the development of marginal fields, high [carbon dioxide] gas fields and fields located in high-pressure, high-temperature conditions," Petronas said in a statement.

It said a gradual revision of domestic gas prices also makes the project "more economically feasible."

The government said in May that it plans to raise the price of gas charged to the power sector by MYR3.00 per million British thermal units every six months, and expects the gas to be sold at market prices by 2016. It raised the price of gas for the power sector to MYR13.70 per mmbtu from MYR10.70 from June 1.

Demand for gas has increased by over 30% since prices were regulated in 1997 to keep them below market levels, Petronas said. However this has made investment less profitable, resulting in low levels of exploration and production activity, it said.

The North Malay Basin project comprises nine gas fields located within Blocks PM301 and PM302 and in the Bergading contract area about 300 kilometers off the coast, and includes a 200-kilometer pipeline from the fields to the state of Terengganu, the company said.

Petronas expects the first delivery of 100 million standard cubic feet of gas per day by early 2013, increasing production to 250 mmscf/d by 2015.

Petronas, Malaysia's only Fortune 500 company and the country's most profitable firm, didn't specify the partners it will be working with.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Lundin Spuds Batu Hitam Well Offshore Malaysia

- Lundin Spuds Batu Hitam Well Offshore Malaysia

Friday, August 19, 2011
Lundin Petroleum AB

Lundin has commenced the drilling of the Batu Hitam prospect located in Block PM308A, offshore the east coast of Peninsular Malaysia.

The Batu Hitam-1 well will test the hydrocarbon potential of a large basement high structure located in the east of the PM308A block. The objectives of the well are Oligocene sandstones in a four-way dip closure and fractured pre-Tertiary basement in the underlying horst block.

The planned total depth is 2,450 meters subsea and the well will be drilled using the jackup drilling rig Offshore Courageous. The well is expected to take approximately 40 days.

Lundin Petroleum operates and holds 35 percent interest in PM308A through its subsidiary Lundin Malaysia BV. Partners in PM308A are JX Nippon Oil & Gas Exploration (Peninsular Malaysia) Limited with 40 percent interest and PETRONAS Carigali Sdn. Bhd. with 25 percent.

Lundin Malaysia BV operates 6 Blocks in Malaysia, namely PM308A, PM308B, PM307, SB303, SB307 and SB308.

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Petronas Enters SFRSC for Balai Cluster Development Offshore Malaysia

- Petronas Enters SFRSC for Balai Cluster Development Offshore Malaysia

Wednesday, August 17, 2011
Roc Oil Co. Ltd.

Petroliam Nasional Berhad (Petronas) has entered into a Small Field Risk Service Contract ("SFRSC") for the pre-development and development of the Balai Cluster Fields, located offshore Sarawak, with a contractor group comprising Roc Oil Malaysia (Holdings) Sdn Bhd, a wholly owned subsidiary of ROC, Dialog D & P Sdn Bhd, a wholly owned subsidiary of Dialog Group Bhd ("DIALOG Group") and Petronas Carigali Sdn Bhd ("Petronas Carigali"). Participating interests in the contractor group are ROC 48%, DIALOG Group 32% and Petronas Carigali 20%. ROC, Dialog and Petronas Carigali intend to form an incorporated joint venture company ("JVC") to manage the SFRSC.

Balai Cluster Fields

The Balai Cluster comprises a cluster of marginal oil and gas fields in the areas around the Balai and West Acis discoveries, which are located offshore Sarawak in water depths of approximately 60 meters.

Small Field Risk Service Contracts

A Risk Service Contract is a new petroleum arrangement Petronas is implementing in Malaysia. This model strikes a balance in sharing risks with fair returns for development and production of discovered marginal fields. In this arrangement, Petronas is the project owner while the contractor is the service provider. Upfront investment of the capital will be contributed by the contractors. The contractor group shall be compensated accordingly with reimbursement of costs plus a remuneration fee for services rendered. The remuneration fee is based on oil and gas production, as well as the contractor group meeting key performance indicators. Payment to contractors shall commence upon first production and be paid throughout the duration of the contract. The SFRSC contract duration is for 15 years.

Planned Activity

The Balai Cluster SFRSC has two distinct phases. The pre-development phase is scheduled to commence in 2H 2011 and is expected to take up to 18 months. Pre-development activities are planned to include geological and geophysical works, the drilling and testing of appraisal wells and the procurement of related facilities and equipment. The total cost of the pre-development phase is estimated to be between US $200-250 million.

ROC presently considers that future cashflows, the existing debt facility, as well as potential project financing through the JVC will adequately fund the capital costs associated with the pre-development phase for the Balai Cluster.

On the successful completion of the pre-development phase and agreement on the project viability of the fields, the contractor group will submit a field development plan for all or some of the fields and progress to the development phase. Production from all the fields in the cluster is planned to be online within 24 months from commencement of the development program. Development activities are planned to include the drilling of wells, the installation of platforms, topsides and pipelines, and the tie-in of the new facilities to existing Petronas Carigali infrastructure as appropriate. The total cost of the development phase is estimated to be between US $650–700 million.

Contractor Group Partners

DIALOG Group is one of Malaysia's leading integrated specialist technical services providers to the oil, gas and petrochemical industries. Headquartered in Kuala Lumpur, DIALOG Group has over 2,000 employees across offices and facilities located in 12 countries, and is listed on the Main Market of Bursa Malaysia with current market capitalisation of approximately US $1.8 billion. The core services and activities provided by DIALOG Group range from upstream to downstream activities and encompass: logistic services for supply base and tank terminal operations; the provision of specialist products and services; the provision of plant maintenance and catalyst handling services; engineering, construction and fabrication; and ePayment technology and solutions.

Petronas Carigali is the wholly owned exploration and production subsidiary of Petronas, Malaysia's National Oil Company. Petronas Carigali has a successful track record of working with multinational corporations to explore, develop and produce oil and gas both in Malaysia and internationally.

CEO Comment

Commenting on the SFRSC award, ROC's Chief Executive Officer, Alan Linn, stated, "This is an encouraging first step in pursuing the Company's stated strategy to grow the business in South East Asia and represents another vote of confidence in ROC's abilities as an offshore operator of small and marginal fields.

"The award of the Small Field Risk Service Contract for the Balai Cluster is also a significant milestone for Petronas in pursuing its strategy of developing Malaysian marginal fields. ROC has worked productively with Petronas and DIALOG Group throughout the process leading to the SFRSC award and looks forward to building on these established relationships in the future.

"ROC's entry into Malaysia is an important achievement and meets one of the Company's key objectives for 2011: to capture value by delivering a new production or pre-development opportunity in South East Asia or Australia."

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Lundin Hits Gas Pay Offshore Malaysia

- Lundin Hits Gas Pay Offshore Malaysia

Thursday, August 04, 2011
Lundin Petroleum AB

Lundin has made a second gas discovery with the Cempulut-1 well that was drilled in Block SB303, offshore Sabah, East Malaysia.

Cempulut-1 was drilled with the Offshore Courageous rig in a water depth of approximately 75 meters. The well was drilled to a total depth of 1,095 meters.

The Cempulut-1 well intersected a large Late Miocene carbonate reef with excellent reservoir properties.

The gross total vertical pay thickness encountered is approximately 50 meters. The deeper targeted oil leg however proved to be water bearing.

An extensive data acquisition program was completed including pressure measurements, sampling and a mini flow test.

The data recovered from the well will be analyzed further in order to determine a range of resource estimates.

Ashley Heppenstall, President and CEO of Lundin Petroleum commented, "This is the second gas discovery made by Lundin Petroleum in SB303 and the third in the contract area which also contains the Titik Terang discovery. All three discoveries are in close proximity to one another and with additional undrilled leads and prospects also in the block a clear opportunity to evaluate the potential for a cluster development now exists."

The rig will now move to drill the Batu Hitam prospect, in PM308A, the third well in Lundin Petroleum's five well drilling campaign in Malaysia in 2011.

Lundin Petroleum holds a 75 percent interest in SB303 through its subsidiary Lundin Malaysia BV. Lundin Malaysia BV's partner is PETRONAS Carigali Sdn Bhd with a 25 percent interest.

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Lundin Spins Bit Offshore Malaysia

- Lundin Spins Bit Offshore Malaysia

Thursday, July 14, 2011
Lundin Petroleum AB

Lundin has commenced the drilling of the Cempulut prospect located in Block SB303, offshore Sabah in East Malaysia.

The main objective of the well is to test a large shallow late Miocene carbonate reef with a crestal seismic amplitude anomaly.

The planned total depth is 1,031 meters subsea and the well will be drilled using the jack-up drilling rig Offshore Courageous. The well is expected to take approximately 30 days.

Lundin Petroleum holds 75 percent interest in SB303 through its subsidiary Lundin Malaysia BV. Lundin Malaysia BV operates 6 Blocks in Malaysia, namely PM308A, PM308B, PM307, SB303, SB307 and SB308.

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Lundin Tastes Sweet Success Offshore Malaysia

- Lundin Tastes Sweet Success Offshore Malaysia

Tuesday, July 12, 2011
Lundin Petroleum AB

Lundin has discovered gas in the Tarap-1 well that was drilled in Block SB303, offshore Sabah, East Malaysia.

Tarap-1 was drilled with the Offshore Courageous rig in a water depth of approximately 70 meters. The well was directionally drilled to a measured depth of 2,675 meters.

The Tarap discovery is a stratigrahic trap and the well encountered gas in each of the 5 independently sealed stacked Miocene sands targeted. Gross total vertical pay thickness for the sands encountered is approximately 150 meters. An extensive data acquisition program was completed including pressure measurements, sampling and a mini flow test in selected zones.

The data recovered from the well will be analyzed further in order to determine a range of resource estimates.

Ashley Heppenstall, President and CEO of Lundin Petroleum commented, "This is an encouraging start to the drilling campaign in Malaysia and provides strong support for our strategy in South East Asia of pursuing organic growth and value creation in focused core areas. With a large number of prospects and leads already identified within SB303, I'm confident that we can continue grow our resource base in this area in the coming years.

"Sabah currently has two gas demand centres located in Kota Kinabalu and Labuan Island that are supplied from existing offshore infrastructure. The addition of a third demand center with the construction of the Sabah Oil and Gas Terminal at Kimanis and the Sabah-Sarawak gas pipeline gives us a broad range of options to explore for gas monetization in the area."

The rig will now move to drill the Cempulut prospect, also in SB303, the second well in Lundin Petroleum's five well drilling campaign in Malaysia in 2011.

Lundin Petroleum holds a 75 percent interest in SB303 through its subsidiary Lundin Malaysia BV. Lundin Malaysia BV's partner is PETRONAS Carigali Sdn Bhd with a 25 percent interest.

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Dril-Quip Scores Supply Contract Offshore Malaysia

- Dril-Quip Scores Supply Contract Offshore Malaysia

Wednesday, June 22, 2011
Dril-Quip Inc.

Dril-Quip announced that Dril-Quip Asia Pacific PTE Ltd, its wholly owned subsidiary located in Singapore, has been awarded a contract valued at approximately US $39 million by Murphy Sabah Oil Company, Ltd. to supply drilling and production equipment for the Kikeh Dry Tree Spar Platform which is located offshore Malaysia in approximately 1,330 meters of water.

Dril-Quip will provide a drilling riser, top tensioned production risers, tensioners, tieback connectors, specialty joints, surface wellheads and production trees to the project. Delivery of these systems is scheduled to begin in 2012.

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Subsea 7 Wins Petronas Contract in Malaysia

- Subsea 7 Wins Petronas Contract in Malaysia

Friday, June 10, 2011
Subsea 7

Subsea 7 announced the award of the Kumang Cluster Project by Petronas Carigali to Subsea 7 Malaysia Sdn Bhd. This award further cements Subsea 7's position in Asia Pacific and Middle East Region.

The project involves the transportation and installation of subsea structures, 5km of umbilical cable, pipeline jumpers and electrical flying leads, including the pre-commissioning of an existing 24" 5km pipeline and new umbilical in the Kumang Field.

The workscope comprises project management and engineering associated with the installation of the subsea equipment. A combined team from Subsea 7 and PETRONAS Carigali will deliver the project enabling greater development and understanding of deepwater technologies and allow most operations to be completed utilizing diverless intervention techniques. The work involves a high level of Malaysian content and will be managed by Subsea 7's office in Kuala Lumpur.

The project will be completed in two phases utilizing Rockwater 2 in 2011.

Dick Martin, Subsea 7's Vice President for Asia said, "Subsea 7 is delighted to be awarded the contract by PETRONAS Carigali to work on this prestigious project. This award underlines and further enhances our reputation in Malaysia in particular to provide safe and quality services to strategic partners such as PETRONAS Carigali."

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Lundin Adds Acreage Offshore Malaysia

- Lundin Adds Acreage Offshore Malaysia

Friday, June 03, 2011
Lundin Petroleum AB

Lundin announced that its wholly owned subsidiary, Lundin Malaysia B.V. has entered into an agreement with Petronas Carigali Sdn Bhd to farm-in to Block PM307 offshore Peninsula Malaysia. Under the agreement, Lundin Petroleum acquires a 75 percent interest and operatorship. Petronas Carigali Sdn Bhd holds the remaining 25 percent interest in the Block.

Block PM307 covers an area of approximately 6,126 km2 and contains a proven oil discovery.

Work commitments include 500 km2 of 3D seismic, an appraisal well on the discovery and an exploration well.

Lundin Petroleum now operates a total of 6 Blocks in Malaysia divided into 2 core areas. The Peninsula Malaysia core area consists of PM307, PM308A and PM308B which are contiguous. The Sabah core area consists of SB303, SB307 and SB308 which are also contiguous blocks.

Ashley Heppenstall, President and CEO of Lundin Petroleum commented, "The signing of this Block marks a further important step forward in Lundin Petroleum’s pursuit of organic growth opportunities in Malaysia and South East Asia. We are particularly encouraged by the recent announcement made by the Malaysian Government regarding fiscal incentives for small fields that when implemented could accelerate commercialization of the proven discovery that exists within the Block."

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SapuraCrest, GE Open O&G Services Facility in Malaysia

- SapuraCrest, GE Open O&G Services Facility in Malaysia

Friday, May 27, 2011
GE O&G

Strengthening its long-term partnership with GE, SapuraCrest Petroleum Berhad, Malaysia's largest integrated oil and gas service provider and a subsidiary of Sapura Group, has opened an expanded, state of the art Regional Services Center (RSC) in Kuala Lumpur, Malaysia.

Covering approximately 24,000 sq. meters, the new $3.5M investment facility enables Sapura and GE to enhance support to key oil and gas operators in Malaysia and the region, including PETRONAS, Malaysia's national oil and gas company which has both a global frame agreement in place with GE Oil & Gas for the supply of a range of gas turbines and compressors and, secondly, a long-term service agreement in place with Sapura to provide services to GE's fleet of installed equipment in the country.

Dato' Sri Mustapa Mohamed, Malaysia's Minister of International Trade & Industry performed the ribbon-cutting at a ceremony attended by over 120 customers and VIPs, including Datuk Abdullah Karim, CEO of PETRONAS Carigali.

Datuk Shahril Shamsuddin, President and CEO of Sapura Group said, "This is a key milestone in our commitment to further push our capabilities into areas strategic to our growth. The partnership with GE will enable Sapura Service Centre to offer an enhanced value proposition to our Malaysian and regional customers to maintain their oil and gas producing equipment at peak performance levels. We have invested RM12million over the last ten years in this facility, to develop our capabilities, processes and facilities to comply with global standards. This certification by GE positions us even stronger and would also result in faster turnaround and cost savings for our customers."

Stuart Dean, CEO of GE ASEAN added, "The Sapura facility expansion highlights the strength of our partnership with Sapura and GE's overall commitment to a strong, localized presence in Malaysia and the region. Malaysia's dynamic oil and gas industry is an important contributor to world energy markets. GE is now even better positioned to deliver enhanced services capabilities to meet the needs of PETRONAS and other customers operating in the region."

The Sapura RSC provides an enhanced range of GE Oil & Gas turbomachinery related services, including maintenance and repairs, designed to enhance the efficiency and performance of GE's fleet of high-tech heavy duty and aeroderivative gas turbines and compressors installed in Malaysia and the region. The facility will also support GE's continued expansion in the drilling and production industry.

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