Contracting activity across the global upstream sector rose 20% in 2Q this year, compared to 1Q, but is still lower than the same period last year, according to the Energy Industries Council's EIC Monitor.
The uptick in EPC activity was focused on Brazil and Norway, while Asia Pacific led when it came to front-end engineering and design awards and the US led in the SURF segment.
In total in 2Q 2015, 49 major contracts (28 engineering procurement and construction (EPC) contracts, nine FEED contracts and 12 subsea, umbilicals, risers and flowlines (SURF) contracts) were awarded across 37 upstream developments, rising 20% from 41 awards in 1Q 2015.
However, this was 71% lower than the from 69 contract awards in 2Q 2014.
EPC Activity
Brazil and Norway have been hotspots of activity in 2Q 2015, together accounting for 13 EPC contracts across 10 different upstream developments.
In Brazil, a total of eight EPC contracts were awarded, five of which were issued to a joint venture between Asian firms BJC Heavy Industries and Cosco Shipyard Group to build 24 floating, production, storage and offloading (FPSO) compression modules. The contracts are for four modules for the P-66 FPSO, earmarked for deployment on the Lulu Sul field development; four modules for the P-68 FPSO (Lulu Extremo Sul/Sul de Lula field development); four modules for the P-69 FPSO (Lulu Oeste field development); eight modules for the P-70 and P-71 FPSOs (Berbigilo, Sururu and Atapu West oil fields); and four modules for the P-67 FPSO (Lulu Norte field development).
A further two contracts have been awarded to another Asian firm, China Offshore Oil Engineering Company (COOEC) for the fabrication of equipment and integration on the Lulu Norte and Berbigilo, Sururu and Atapu West oil fields. The remaining contract is for EPC work on the BT-PN-8 Gavião Branco onshore gas field in Maranhão state, operated by Parnaiba Gas Natural, where a consortium of Fluor, Construcap CCPS Engenharia e Comércio and CFPS Engenharia e Projetos have been appointed to carry out the EPC work for a 300 MMcf/d gas gathering system and 40km pipeline.
Despite the widely reported impacts of the oil price on activity in the North Sea, five EPC contracts have been awarded on developments offshore Norway as operators press ahead with current development projects. As Statoil ramps up to construction of the Johan Sverdrup infrastructure in the Utsira High region, a consortium between KBR and Kvaerner have been awarded a contract to supply the topsides for the utility and living quarters platform.
In turn, the partners have sub-contracted the EPC work for the accommodation module to Norwegian firm, Apply Leirvik. Further north, Statoil also moved ahead with its Gina Krog project, located 30km north-west of Sleipner, awarding Sembcorp Marine a contract for a floating, storage and offloading (FSO) vessel conversion.
German operator Wintershall contracted Aibel to carry out modification work on the Heidrun platform as part of its Maria field development. In order to develop the Maria oil field, Wintershall submitted plans to build two subsea templates to be tied back to the existing Kristin, Heidrun and Asgard B platforms. Norwegian firm Aibel secured a further contract from Statoil for the disengagement of the embattled Njord A platform, which is being brought back to shore for assessments regarding its future operation.
Also in the North Sea, one EPC contract was awarded in the UK in the last quarter to Wood Group PSN, who has been awarded a five-year EPC contract for EnQuest’s Thistle & Deveron oil field redevelopment.
FEED Activity
In 2Q 2015, almost half of the upstream FEED contracts awarded were for projects in the Asia Pacific region. Wood Group Kenny secured two contracts in the region, one to carry out engineering and design services for top tensioned risers on the Ca Rong Do oil and gas, offshore Vietnam, and the other to support operator Kebabangan Petroleum Operating Company with studies of subsea heating options for a 30km gas pipeline, which is part of the Kebabangan Cluster project offshore Sabah, Malaysia.
In neighboring Indonesia, KrisEnergy appointed Synergy Engineering to provide FEED services for its Lengo gas discovery, part of the Bulu PSC, in East Java, Indonesia. The studies will define the proposed wellhead platform, export pipeline and onshore receiving facility. In China, state-run operator CNOOC awarded a FEED contract to a consortium of COOEC and Technip for two tension leg platforms (TLPs) to be installed at its Liuhua 11-1 and Liuhua 16-2 oil fields in the South China Sea.
Technip also secured a major contract from Jurong Shipyard to carry out detailed engineering and procurement services for the conversion of an FPSO vessel, which will deployed on Petrobras’ Libra gas field, offshore Brazil.
In Western Europe, Aibel continued to rack up its share of North Sea contracts, securing further work to provide FEED services for brownfield topsides modifications on Statoil’s Oseberg Future Development Project. Also in the North Sea, main FEED contractor Amec Foster Wheeler awarded a contract to Jee to provide design and engineering services for a jacket rigid polymer injection riser package on Chevon’s Captain field enhanced oil recovery project. This pilot project is aimed at demonstrating the use of polymer chemical injection technology for enhanced oil recovery.
Subsea/SURF Activity
The US has been a hotspot of activity in 2Q 2015, accounting for three SURF/subsea contracts in the deepwater Mississippi Canyon area of the Gulf of Mexico. Technip secured two subsea engineering, fabrication and installation contracts, one for two rigid flowlines on BP’s Thunder Horse South Expansion, and one for riser, umbilicals, flowline, pipeline end terminations, manifold foundation and jumpers for Chevron’s Blind Faith 2 subsea development. Also, LLOG Exploration awarded McDermott International a contract to supply a flowline and catenary riser for its subsea tieback at the Otis oil field.
McDermott also secured a contract to engineer and install flexible lines for Queiroz Galvão’s Block BS-4 - Atlanta heavy oil field hub (Oliva oil field tie back), in the Santos Basin offshore Brazil, while GE Oil & Gas was awarded the contract to supply the 28km of flexible lines.
Also in the last quarter, Statoil awarded further contracts on its Maria oil field development, appointing Subsea 7 to install subsea flowlines and facilities, and DeepOcean to carry out riser installation at the Kristin and Heidrun platforms. Meanwhile, on the UKCS, Dana Petroleum awarded Technip a brownfield subsea fabrication and installation contract on the Triton FPSO, which produces oil from the Bittern, Clapham, Pict, Saxon, Guillemot and North West fields.
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