Subsea 7 has won a substantial contract to install subsea systems and pipelines on the Atoll project offshore Egypt
Some of the predicted contract awards for offshore construction and support vessels in the Eastern Mediterranean are starting to materialise. There has been great expectation recently that large gas discoveries in the region will result in new contracts for subsea construction companies and supporting vessels. In November, one of the first of the expected contracts was awarded.
Subsea 7 gained a substantial order for offshore construction work in Egypt. It gained the contract from Pharaonic Petroleum Co, an affiliate of BP, for subsea engineering, procurement, construction and installation work on the Atoll project. Subsea 7 will be responsible for installing more than 40km of rigid pipelines and associated structures for the new Atoll field. The water depths for the installation work range from 100m to 900m. Subsea 7 will also be tying these pipelines into the existing Taurt field facilities, which are in water depths of 100m, and installing 105km of umbilicals to connect subsea wells on the Atoll field.
Engineering and procurement services have already begun on this project. However, the offshore programme will not begin until the second half of 2017. The offshore installation and commissioning work will continue until nearly the end of the first quarter of 2018. Subsea 7 said it will use subsea construction and pipelay vessels Seven Borealis, Seven Eagle and Seven Arctic for the project.
Subsea 7 worked for Pharaonic Petroleum on another project this year. It gained a contract last year to help develop the third phase of the East Nile Delta gas fields. This involves the engineering and installation of pipeline, subsea structures, umbilicals and rigid spools over deepwater gas fields. Offshore operations on this fast-track project were concluded this quarter after Seven Borealis installed the final subsea component.
A rival subsea construction vessel operator has also worked offshore Egypt this year. Saipem gained a contract from Eni in the second quarter to provide engineering, procurement, construction and installation services on the Zohr development. It is installing gas pipelines, service lines and umbilicals to link subsea wells to shore using a fleet of vessels, including deepwater pipelayer Castorone, semi-submersible pipelayer Castoro Sei and trenching/pipelay barge Castoro 10. This work is expected to continue until the end of 2017.
In the Black Sea, French oil major Total has made a large oil discovery that it says opens up a new area for exploration and field development. Total used 2013-built drillship Noble Globetrotter II to drill the well on the Khan Asparuh block. The Polshkov well is nearly 130km offshore Bulgaria. Its success is likely to trigger further investment in this section of the Black Sea by Total and its partners, which includes Austria’s OMV and Repsol of Spain. This would be a boost for demand for OSVs stationed in the area.
In the Caspian, Total is also a partner in the Kashagan project in Kazakhstan, which met an important milestone in October. The first oil was exported via two pipelines from the giant oil field after a prolonged shutdown cut the initial production. The US$50 billion project has been beset by delays and problems since development began a decade ago, so the field operator North Caspian Operating Co will be pleased to restart exports since facilities were closed down three years ago. Kashagan began production in 2013, but output was suspended because of technical problems with the gas pipelines. It restarted test production in September.