Irish Sea progress driving growth of service sector in North West

Aug. 1, 1996
Map shows current acreage holders in the UK Irish Sea. [40607 bytes] BHP's Liverpool Bay Douglas complex: the processing platform (centre) is bridge-linked to the accommodation unit (left) and the wellhead platform (right). West Coast Britain is seeing a resurgence in production and exploration activity. BHP's Liverpool Bay project is into its ninth month of oil and gas production, and seven other operators are drilling for new gas in The Irish Sea. Cardigan Bay also faces a
BHP's Liverpool Bay Douglas complex: the processing platform (centre) is bridge-linked to the accommodation unit (left) and the wellhead platform (right).

West Coast Britain is seeing a resurgence in production and exploration activity. BHP's Liverpool Bay project is into its ninth month of oil and gas production, and seven other operators are drilling for new gas in The Irish Sea. Cardigan Bay also faces a mini-upsurge in exploration next year.

In the past, when Morecambe Bay was the region's main focus for E&P, most support services came through British Gas' Heysham base. Since 1994, however, the situation has become more competitive, with new oil and gas supplier initiatives in Merseyside (the district closest to Liverpool Bay) and the formation of an Irish Sea Offshore Contractors' Association (Isocon).

Liverpool Bay, at £1 billion, was the biggest UK offshore development project prior to ETAP, with six platforms offshore and a new gas reception terminal at Point of Ayr, Wales. Most of the construction contracts went to companies outside North West England, apart from installation of a pipeline to the terminal, performed by Land and Marine, and the oil storage vessel management contract. This went to Bibby Line, partly on the strength of its track record managing Chevron's Alba Field FSU.

Field support operations, however, needed to be local. In 1994, BHP chose Liverpool's Speke Airport for helicopter flights (handled by Bond) and appointed Rowco for an initial five years to manage its operations support base at West Hornby Dock, Bootle.

With annual operating costs for the fields budgeted at £40 million, the local Sefton Council could see serious business opportunities for local suppliers. Merseyside is particularly strong in marine engineering skills with shipbuilder Cammell Laird a long-standing employer in Birkenhead. The question was, how to sell those skills to BHP.

Sefton teamed up with four other local councils, Bootle Maritime City Challenge and the Mersey Docks and Harbour Company to form the Merseyside Oil and Gas Group (MOGG). This was spearheaded by Charlie Green of Sefton, who asked BHP what support services it needed. He then compiled a database of 500 local companies that might be relevant to Liverpool Bay.

From that, BHP selected a list of suppliers it wished to talk to. Representatives of these companies were rounded up in late 1994 to meet buyers from BHP, development drilling contractor Sedco Forex and Halliburton, which manages the platforms' maintenance vessel Irish Sea Pioneer. Following the meeting, one in four of the companies received tender documents.

Around the same time, a new licensing round was under way for the Irish Sea. Marathon had discovered gas off west Wales, and the Solway Firth and Isle of Man waters were attracting exploration. A group of North West companies responded by forming Isocon, which today has 50 members located from Cumbria down to north Wales and including Bibby Group, Furmanite International and Costain Land and Marine. They meet periodically with BHP operations personnel, but their target area extends to the Atlantic Margin off Ireland. They also plan to co-operate with Irish and Isle of Man service groups.

Isocon and MOGG gave a presentation at Offshore Europe last year which was attended by some of the Irish Sea operators. Since then, member companies have hosted site visits from Esso and Elf. This spring, Liverpool staged the Exploration Europe exhibition which brought together 50 North West suppliers with other oil and gas companies from Norway, The Netherlands, Scotland and Sweden. Joint business arrangements were explored.

MOGG receives European Regional Development aid as well as assistance from local training and enterprise groups. Currently it is underwriting funding shortfalls for Isocon whilst the latter builds up its membership base: targets include the petrochemicals sector companies around Runcorn and Widnes. But MOGG also wants to attract established offshore sector players to Merseyside.

Recent arrivals include satellite communications group EAE and NECE Corrosion Services. Stewart and Stevenson Technical Services is also setting up a base in Liverpool in support of a 12-year contract from BHP to maintain power generation equipment and gas compressors at Point of Ayr and the Douglas platform.

MOGG also wants to foster interplay between oil company operators and local colleges and universities. John Moores University in Liverpool is already drawing up courses in offshore engineering. Liverpool University's Mechanical Engineering Laboratories are researching drilling mud and cement behaviour under sponsorship from BP and Shell.

(Top) West Hornby dock, housing the Rowco-managed support base for Liverpool Bay. (Left) Glomar Adriatic XI, currently fulfilling a multi-well programme for numerous operators in the Irish Sea.

Support bases

Rowco's Bootle support base at West Hornby and West Alexandra docks has drilling, storage and warehousing facilities which have been used by BW Muds and the CSO Wellservicer amongst others. Four berths, 320 metres of quayside and 25,000 sq ft of warehousing are available to contractors involved in any E & P project off the UK west coast.

But the dominant Irish Sea support base is further up the coast at Heysham port's North Quay. It was built by British Gas in 1982 onwards, primarily to support its new Morecambe Bay gasfield operations. Over the years it also handled occasional third party contracts for other oil companies' drilling programs.

Following the demerger of British Gas into two separate trading organisations, the 21 acre facilities at North Quay have been reorganised on more commercial lines under a new title, Hydrocarbon Resources Limited (HRL). It is now pursuing actively third party business across the Irish Sea and beyond. For the helicopters, which fly from Blackpool Airport, the Solway Firth off southern Scotland is the current range limit, although Super Pumas might be considered if, say, Rockall Trough activity justified the expense.

HRL's major current third party contract is for Global Marine, which uses logistics at Heysham to support a multi-well drilling programme in the Irish Sea. Jack-up Glomar Adriatic XI (which was converted and purchased from British Gas) has performed single-well wildcats this year for Clyde in the English sector; Esso and Marathon in Isle of Man waters; and Esso in the Solway Firth.

Depending on discoveries (so far, none have been reported), HRL has options to service the rig next year as well. Last year the site also supported a large 3D seismic survey over the Irish Sea, led by British Gas but co-funded by numerous licence holders in the area which shared the data. HRL's 150 metre long, two-berth quay can accommodate two seismic vessels at the same time.

One reason that HRL needs more third-party business is excess capacity at the base. The infrastructure was built "in Rolls Royce style", according to new manager Kevin Cochrane, to allow for future expansion.

Current facilities include:

  • a 24 hour port, unrestricted by tides.

  • a 20 tonne dockside crane plus mobile cranes to order at short notice, with additional quay space available by arrangement.

  • 55,000 sq ft of modern, covered warehousing with computer-based, integrated logistics management.

  • separate, fully furnished accommodation containing communications.

  • pipeyards, cement/barite/bentonite silos, bunkering facilities and waste management control.

  • two standby vessels, and a third that operates in standby mode during the week, returning to the harbour at weekends to collect supplies: BHP has uses the supply vessel on an ad hoc basis for Liverpool Bay.

HRL also keeps functioning in most weather conditions. A snow plough was used once to help liberate a drilling rig stuck in five ft of snow. The base is non-unionised, which means it is not disrupted by the strikes that have hit the Merseyside docks recently.

Working with third parties also means developing price schedules. "We are seeking to improve rates with various options for costing to suit different operators," says Cochrane. "We can't dictate terms, as was the case in the past."

At Offshore Europe last year, British Gas exhibited with Lancaster City Council on the Offshore Lancashire stand. With Morecambe Bay's platforms mainly unmanned, there is little scope for a booming offshore technology service sector in the Lancaster area at present. The council's main involvement is to promote Heysham as an E&P base - not just for British Gas, but for the Port of Heysham, which has plenty of spare acreage and quay space available to the offshore sector, with its own 30 tonne travelling crane.

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