March 1, 2006
Tenders were issued to pre-qualified companies for two contracts on the estimated $762-million subsea section of the Medgaz pipeline running from Algeria to Spain.

Tenders for Algeria-Spain subsea pipeline

Tenders were issued to pre-qualified companies for two contracts on the estimated $762-million subsea section of the Medgaz pipeline running from Algeria to Spain. A total of three tenders have been issued for material supply and installation activities.

Five companies have been invited to submit bids by mid-March for the supply contract of line pipe to Medgaz. In addition, four other companies have until April to bid for a contract to supply turbine-driven compressors. A final tender is for the main contract of the subsea infrastructure, calling for the installation of the pipeline and construction of the compressor stations and reception terminals.

Once completed, the Medgaz pipeline will supply 8,000 MMcm/yr of gas to Spain, where demand for gas demand is growing by approximately 20% per year.

All three contracts are expected to be awarded by the end of May 2006.

Statoil awards contract for Vigdis expansion

FMC Technologies has been awarded a $25 million contract to provide subsea systems for Statoil’s Vigdis Extension Phase 2 Project in the North Sea.

The contract includes subsea trees, a template structure with integrated manifold, topside control systems, and related equipment. Deliveries are expected to begin in 2006.

“The contract award for the Vigdis Extension reflects our continued commitment to provide subsea solutions in the North Sea, as well as the strength of our relationship with Statoil,” says Peter D. Kinnear, executive VP, FMC Technologies.

Fugro award Brazil contract

Petrobras has awarded a $24.5-million contract to Fugro OceansatPEG SA, a joint venture in which Fugro has an interest of 62%, for a variety of inspection and construction support services in Brazilian waters over a period of two years. The contract includes an option for a two-year extension.

Fugro will expand its ROV offerings in the next two years by developing eight new work class ROV systems. These systems (fitted with remote-controlled underwater cameras and manipulators) will be used for inspection and maintenance, drilling support, as well as construction support activities such as underwater pipelaying. A number of these new ROVs are designed to operate in water depths up to 3,000 m.

Oooguruk field subsea flowline

Pioneer Natural Resources Co. is beginning the development of the Oooguruk field on the North Slope of Alaska and will build a subsea flowline to carry produced liquids onshore. The field is located in the shallow waters of the Beaufort Sea approximately 8 mi northwest of the Kuparuk River Unit.

Pioneer has already begun installation operations of an offshore gravel drilling and production site to complete gravel hauling activities during the 2006 winter construction season. Following construction of the drilling and production site, a subsea flowline and associated facilities will be installed during 2007 to transport produced liquids to existing onshore processing facilities at the Kuparuk River Unit.

Pioneer plans to drill approximately 40 horizontal wells to develop an estimated 50-90 MMbbl of reserves. The wells are expected to be brought online as drilling progresses, with peak rates of approximately 15,000 to 20,000 b/d of oil expected by 2010.

Depending on weather conditions and facilities completion and accessibility, development drilling could begin as early as the fall of 2007. Total gross capital invested, including projected drilling and facility costs, is expected to range from $450 million to $525 million.

Houston-based Deep Marine Technology, Inc. has acquired two new Triton XLS ROVs from Perry Slingsby Systems. The two 150-hp ROVs, designated XLS 21 and 22, are rated to 3,000-m water depth. Additional capabilities include 600 m of useable tether, 15-in. thrusters, station keeping and Ethernet capabilities. The ROVs will be installed onboard DMT’s new 300-ft MSV, the DMT Emerald and will be used in support of services for subsea tree installations, jumper installations, and subsea construction and intervention. They are scheduled for delivery in September 2006.
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Pioneer is operator with 70% interest in the Oooguruk field and Eni Petroleum owns a 30% working interest and is expected to make its participation election for the project during 1Q 2006. Pursuant to the farm-out agreement concluded in January 2004, ConocoPhillips retains the right to elect to participate in the project.

Casino subsea field onstream early

Production from the Santos-operated Casino gas project, offshore Victoria, has started three years after discovery with the delivery of first commissioning gas to TRUenergy’s Iona processing plant near Port Campbell.

In 70 m of water, the project’s gas production will be transported from subsea wellheads through a seafloor pipeline that comes ashore via a directionally-drilled underground shore crossing for processing at the existing Iona gas plant.

The Casino gas field is the first commercial development within VIC/P44.

Santos says Casino is its second operated offshore project to go onstream ahead of schedule within the past nine months. It follows the Mutineer-Exeter oil field, which began production in April 2005, three months ahead of schedule.

Casino “provides further evidence that we have the expertise and ability in Australia to bring important resource projects successfully to completion within short cycle-times,” Santos Managing Director John Ellice-Flint, says. “It is a timely example of how corporate Australia can work with governments and other various project stakeholders, including landowners and fishing groups, to develop projects successfully, on time and without unnecessary delays.”

Participants in VIC P/44 are operator Santos with 50%, AWE subsidiary Peedamullah Petroleum Pty Ltd. with 25%, and Mitsui subsidiary Mittwell Energy Resources Pty Ltd. with 25%.

The joint venture participants are also currently planning for the development of the adjacent Henry gas field, discovered in July 2005. Accelerated exploration drilling activity in adjacent prospects is also planned for 2006, subject to drilling rig availability.