Rigzone highlights the major collaboration agreements involving European oil and gas firms that took place in 2015.
In the face of the current low oil price environment, which has seen the price of Brent slip from over $100 per barrel in 2014 to under $40 per barrel at the end of 2015, several companies in the oil and gas industry have banded together in an effort to combine resources, reduce costs and promote innovation.
E&P, Energy Security & Logistics
Russia’s Gazprom Neft was involved in one of the year’s most significant collaborative arrangements related to oil and gas exploration and production in April, when it signed several agreements with Vietnam Oil and Gas Group (PetroVietnam) – including a memorandum on joint oil and gas exploration, production and development projects on the Pechora Sea shelf in Russia. The upstream agreement, which focuses on the Dolginskoye field and the Severo-Zapadnyi (North West) licensed block, involved the proposed creation of a working group of experts from both companies who would form a list of priority oil and gas fields and agree to the basic terms of the partnership before further agreements are signed.
Later in the same month, a handful of European energy players – including Statoil ASA, Eni Norge AS, Lundin Norway AS, OMV Group and GDF Suez – joined forces for the BaSEC (Barents Sea Exploration Collaboration) project to solve operational issues connected to the exploration of the Barents Sea in Norway’s Arctic region. The project is scheduled to last for three years and has a particular focus on the 54 blocks/parts of blocks in the Barents Sea which form part of Norway’s 23rd licensing round. Initiated by Statoil and Eni Norge, the BaSEC project will see member companies share data, apply cost-effective solutions and increase collaboration and coordination during the next few years. Statoil has also claimed that more participants will join the project after Norway’s latest licensing round, which will see the Ministry of Petroleum and Energy award new licenses before the summer of 2016.
In an effort to cut costs and drive efficiencies across their UK operations in the Southern North Sea, UK-headquartered oilfield services company Petrofac and European energy firms Faroe Petroleum plc and Eni Hewett Ltd. established a partnership in November. The agreement will see collaboration between Petrofac and the respective equity owners and operators of the Hewett, Schooner and Ketch gas fields, with logistics and accommodation services across the facilities being shared. Faroe Petroleum will share the usage of its Augusta Westland 139 helicopter with Eni Hewett and, in exchange, offshore personnel contracted to the normally unmanned Schooner and Ketch assets will stay nearby on the Eni Hewett complex rather than returning to shore each day, cutting down travel time and ensuring cost efficient mobilization of personnel. Petrofac will also be able to mobilize its workforce, as required, across both operations.
In September, Oil & Gas UK announced the launch of a new North Sea task force, which aims to improve the efficiency and competitiveness of the UK’s oil and gas industry. The Efficiency Task Force (ETF) will be responsible for “driving improvement, making the sector more competitive and supporting the drive to maximize economic recovery from the UK continental shelf”, according to Oil & Gas UK. In order to try and achieve its goals, the ETF will aim to deliver behavioral change, standardization initiatives and company collaboration. Led by John Pearson, who is the group president Northern Europe and CIS for AMEC Foster Wheeler and the Oil & Gas UK co-chairman, the ETF will be supported by a dedicated resource from Oil & Gas UK and its industry members.
The increased partnership activity across the North Sea is good news for the UK oil and gas sector, especially when considering the fact that certain factions of the energy industry warned of a bleak future within the UK Continental Shelf if collaboration among companies operating in the region came to a halt.
Another key collaboration agreement was announced by the European Commission last summer, which involved 15 European Union and Energy Community countries, in the Central Eastern Europe and South East European region, signing a Memorandum of Understanding (MoU) to work together to accelerate the building of missing gas infrastructure links. The MoU will “boost security of energy supply and lead to the creation of a connected and competitive energy market in the region”, according to an EC statement, and ultimately aims for each country in the area to have at least three different sources of gas.
Other notable MoUs signed throughout 2015 include an agreement between Ukraine’s national energy company National Joint Stock Company Naftogaz of Ukraine and international energy firm Frontera Resources, for upstream and LNG cooperation in the eastern European country, and Mediterranean oil and gas company Sound Energy plc’s arrangement with Schlumberger Oilfield Holdings Limited to work together across Europe and Africa.
Irish based oil and gas exploration company Providence Resources plc also signed a collaboration agreement with Schlumberger for the exploration of the southern Porcupine and Goban Spur basins, located offshore Ireland. As part of the agreement, the two companies are conducting a joint study that is designed to de-risk the Dunquin South, Drombeg, Druid and Newgrange exploration prospects. Schlumberger will also support Providence in facilitating farm-out data-room processes for the Drombeg, Druid and Newgrange assets, which are expected to commence during the first quarter of 2016.
Oil, Gas Technology Collaboration
In May 2015, French energy major Total S.A. signed a partnership agreement with FMC Technologies for the development of subsea technology. Later in September, UK-based Magma Global Ltd. signed a joint development agreement with BP plc and European engineering company Subsea 7 S.A. for Magma’s deepwater environment riser and jumper system m-pipes, which are made using a carbon fiber and polymer composite. In addition, in December of last year, European oil and gas services companies Aker Solutions ASA and Saipem S.p.A. also agreed to cooperate on targeted subsea oil and gas development projects worldwide.
In a bid to try and drive down manufacturing costs in the oil and gas industry and enhance the materials in use in the sector, Aberdeen’s Oil & Gas Innovation Center (OGIC) and UK-government supported High Value Manufacturing (HVM) Catapult, which is a network of seven major UK technology and innovation centers, struck up a partnership in September. As part of the agreement, OGIC is hosting a representative from HVM Catapult in its Aberdeen office to support engagement with the oil and gas industry and encourage collaboration between the two organizations.
Norway’s Statoil and GE also teamed up at the beginning of the year to establish a joint technology-focused program to speed up the development of environmentally and economically sustainable energy solutions to address the biggest challenges facing global oil and gas development. Through this collaboration, the companies are focusing on solutions to address issues such as natural gas flaring, carbon dioxide and methane emissions and water usage.
The two companies launched the first Open Innovation Challenge in late January, which strived to find solutions for reducing the environmental impact of unconventional exploration and production. The goal of the event was to crowdsource ways of reducing the amount of water and proppant being trucked to shale exploration and production areas by seeking new uses and compositions of proppants. GE and Statoil’s second Open Innovation Challenge, which stopped accepting submissions in September, focuses on finding innovative ways to reduce water usage in unconventional oil and gas development and reusing water from development while maintaining or boosting productivity.
The numerous collaboration agreements signed by European oil and gas firms in 2015 have undoubtedly helped an energy industry which is currently struggling with a lower commodity price. With many experts predicting a similar oil price environment in 2016, it will be important for companies in the oil and gas sector to continue to work together in order to overcome the many challenges posed by such a harsh industry climate.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
More from this Author
Most Popular Articles
From the Career Center
Jobs that may interest you