The accommodation jackup rig with Plug & Abandonment (P&A)
features will be based on Keppel’s KFELS J Class design which is suited
for the harsh environment of the Norwegian North Sea.
Keppel FELS Limited (Keppel FELS), a wholly owned subsidiary of
Keppel Offshore & Marine (Keppel O&M) has signed an engineering
services agreement with Workfox B.V, a subsidiary of the Seafox Group
(Seafox), to embark on an engineering study of a purpose-built
accommodation jackup rig with well intervention and P&A features.
The project, which is named Seafox 8, is being developed to
address a gap in the current P&A market. Subsea fields are reaching
the end of their productive lives in areas such as the North Sea and the
Gulf of Mexico. With increasing environmental concerns and regulations,
there are a substantial number of wells in both these regions that will
need to be properly sealed up in the next few years.
Seafox 8 will be able to offer P&A services, well intervention
services, as well as accommodation and crane support services. It has a
spacious deck and comprehensive amenities for the comfort of 282 persons
on board. The jackup can also be configured for other offshore support
services. Compared to existing jackups chartered for P&A work,
Seafox 8 is expected to be 25-30% more economical in terms of dayrates.
It will be the first accommodation and service jackup unit that is
specifically suited to support rigless activities for P&A and well
services at a competitive cost.
Leveraging the successful partnership of an earlier project, Seafox
5, Keppel O&M is also in discussion with
Seafox to enter into a
joint venture to place an order for Seafox 8 upon completion of the
study, which is expected in 2H 2014.
Mr Keesjan Cordia, CEO of Seafox, said, "With our background in
providing accommodation support, workover, construction, and
decommissioning services to the offshore oil & gas industry, we
noticed the strong demand for P&A services and identified a need for
a specialised rig in this market. We believe the jackup we are
conceiving, Seafox 8, offers the ideal solution as it can work all year
round including during the North Sea's winter period and undertake
multiple services at a time. It is a real workhorse and unlike drilling
rigs which are often used to do P&A currently, Seafox 8 has the
crane capacity to assist with maintenance and well services activities.
It has NORSOK-specified accommodation for crew and client personnel, and
a lower operating cost than existing equipment with a single role
purpose."
"We are glad to continue this winning partnership we have with Keppel
in coming up with innovative products. Seafox 5, a multi-purpose
self-elevating platform (MPSEP), which they built for us previously, has
been performing extremely well and I am confident that Seafox 8 will be
just as successful."
The hull and legs of the new generation jackup rig will be based on
Keppel's new KFELS J Class design which is customised to operate in
water depths of up to 112 metres in the harsh offshore environmental
conditions of the Norwegian North Sea.
Developed by Offshore Technology Development (OTD), Keppel's R&D
arm, the robust KFELS J Class is designed as a drilling jackup rig for
the Norwegian North Sea and is an enhancement of Keppel's proven harsh
environment drilling rigs - the KFELS N Class and KFELS G Class designs.
Keppel O&M has previously delivered three rigs of each design,
which have been successfully operating in the North Sea including
Norwegian waters.
Mr Wong Kok Seng, Managing Director of Keppel O&M (Offshore) and
Keppel FELS said, "We have successfully developed and commercialised
many proprietary concepts for a variety of offshore services and
challenging frontiers by partnering our trendsetting customers in the
early stages of those projects. For Seafox 8, we are taking the hull of
an ultra-harsh environment rig in our KFELS J Class for use as an
accommodation rig with equipment for P&A services. The KFELS J Class
extends the capabilities of our proven KFELS G Class and KFELS N Class
designs for work in the North Sea.
"This is an example of how we have been able to leverage and apply
our technology expertise innovatively for a variety of offshore
applications. And with an experienced partner like Seafox in this
market, we are confident Seafox 8 will be well-received and give us a
good head start in growing our track record as the leading solutions
provider for the P&A services sector."
Keppel O&M and Seafox have a 49/51 joint venture in Seafox 5, an
offshore wind turbine installation vessel which was built to Keppel's
proprietary MPSEP design. Delivered in 2012, Seafox 5 has successfully
installed 80 monopiles for offshore wind turbines in the German Sector
of the North Sea and is currently deployed for Maersk Oil and Gas for
accommodation and maintenance work. After its contract with Maersk,
Seafox 5 will be chartered to DONG Energy E&P to service their
operation at the Hejre field, in the Central North Sea, off the coast of
Denmark.
Mr Wong added, "With Seafox 5, our foray into the offshore wind and
oil and gas support services market has proven to be successful. Seafox
is the leading operator in this field and Seafox 5 has received
excellent charters and strong enquiries. Having done our due diligence
on the P&A market, we are replicating this successful partnership
with Seafox to be one of the first to seize the opportunities in this
market."
The above agreement is not expected to have any material impact on
the net tangible assets and earnings per share of Keppel Corporation
Limited for the current financial year.
About the plug and abandonment market
Countries
and industry regulatory officials are mandating the offshore oil and gas
operators to immediately seal unproductive wells to permanently remove
these potential environmental threats. Service companies are developing
tools and methods to limit the economic impact of fulfilling these
obligations.
Industry estimates put as many as 12,000 wells in
the Gulf of Mexico which qualify as P&A candidates. In the UK sector
of the North Sea alone, it is estimated that more than 500 structures
with about 3,000 wells are slated for permanent abandonment in the near
future. In the Norwegian sector of the North Sea, more than 350
platforms and more than 3,700 wells eventually must be permanently
abandoned. Nearly 70 per cent of the forecast wells P&A expenditure
is in the Central and Northern North Sea, equating to £3.1 billion.
Almost 480 wells are scheduled for decommissioning in these regions, of
which nearly 60 per cent are platform wells.
There are currently two methods of P&A. The first is using the
available equipment on a fixed platform to execute the P&A without
the support of a rig. This method is almost always faced with constrains
on deck and bed space limitations, multiple logistics challenges and
the downside of high man-hours. Another method is using drilling rigs
with the use of third party equipment. However, drilling rigs' dayrates
are rather expensive for such applications.
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