Turnkey skills build-up expands contracting field for Umoe

Umoe's expanding capability has been led by chairman Jens Ulltveit-Moe.

Increased emphasis on turnkey contracting in Norwegian field developments has benefited the Umoe group, allowing it to claim a place among Norway's leading contractors. Its star current references are two EPC contracts to provide semisubmersible floating production platforms for Norsk Hydro's Visund and Troll C projects.

The roots of the group's present composition go back to the 1980s, when Umoe acquired the shipowner Knutsen and Schat-Harding, the supplier of free-fall lifeboats. A further big stride was taken in 1990 with the acquisition of the Haugesund Mekaniske Verksted offshore fabrication yard and the Sterkoder shipyard.

Final core capability has been added in the last three years with the establishment of Umoe Technology as a center of engineering expertise. Having opened an office in Oslo last year, this company now employs 700 engineers.

"We started as a group that made things for others," explains Jens Ulltveit-Moe, chairman of the Umoe holding group. "Then when the oil companies wanted to reduce their activities and outsource, we had to upgrade our skills. We have now achieved success as a fully-fledged integrated supplier of FPUs."

Developing capability

In the year between the awards of the Visund and Troll C contracts, the group's one-stop-shop capability advanced. Whereas on Visund Maritime Tentech participates in the topsides engineering, in the case of Troll C engineering is being performed completely in-house by Umoe, mainly out of the Oslo office .

"It was very important for us to get these big contracts," says Ulltveit-Moe. "They represent a big challenge in terms of technology and complexity of organization. There are only three contractors in Norway capable of performing them - Aker Maritime, Kvaerner and ourselves."

The Haugesund fabrication yard is well known as a module and platform builder. Having last year supplied the deck and mud module for the new Ekofisk 2/4-X wellhead platform, it was due in July to deliver the separation module for 2/4-J, the new Ekofisk process platform. It also performed the offshore hook-up and commissioning on 2/4-X.

In addition to developing its turnkey capabilities, the yard was also involved in the first partnering project on the Norwegian shelf. This was Statoil's Sleipner West wellhead platform, for which it delivered the wellhead module in 1995. It was followed by the Ekofisk 2/4-X topsides project, which was run as an alliance.

Umoe Haugesund has an exclusive license agreement with Technip Geoproduction for the marketing and fabrication of the TPG-500 jackup drilling and production platform in Norway.

Haugesund is also the base for Umoe's participation in the fast-growing maintenance and modifications market. The company has contracts covering Hydro's offshore platforms and the Sture terminal, and Statoil's Kaarstoe terminal and the Draupner riser platforms.

FPSO ambitions

Umoe is unique among Norway's leading contractors in being a shipowner. In addition to products and chemical tankers, Knutsen also has a fleet of eight shuttle tankers, one of the world's largest. These are currently all employed in the Norwegian offshore sector.

The marine operating experience gained from this activity has been important in developing Umoe's own floating production, storage and offloading (FPSO) concept, the Umoe TC-500. In line with the group's basic philosophy, the concept is offered as a total development package.

The vessel, designed by Umoe Haugesund, has a base-case oil production capacity of 70,000 b/d and storage of 500,000 bbl. The 14 cargo tanks in the hull are protected from side impact by water ballast tanks. Pump systems are based on Frank Mohn's submerged solutions, thus eliminating the need for pump rooms. The design is also claimed to be environmentally friendly, with carbon dioxide and nitrogen oxide emissions well below the average for the Norwegian shelf.

Subsea production facilities are provided by Kongsberg Offshore, based on the use of its standardized Hinge-Over Subsea Template (HOST) system, while the shuttle tanker operation is provided by Knutsen. Outfitting of the vessel could take place at the Haugesund yard.

"The shipowning experience is very relevant when it comes to the financing of leased FPSOs," says Ulltveit-Moe. "FPSOs are technically more challenging in this respect, but the financing mechanism is similar."

At the moment the legal framework in Norway militates against the leasing of floaters by contractors, though Ulltveit-More sees signs that this may change. But leasing is standard practice in the UK, a market that the group now plans to enter.

Meanwhile Umoe Sterkoder, though not big enough to build FPSO hulls, has positioned itself in the market for sophisticated multipurpose offshore service vessels, including vessels for construction/installation, subsea maintenance, well service, anchor handling and towing, as well as seismic survey vessels.

Though the basic building blocks are in place, the group is still in the process of fleshing out its capabilities. "We have still some way to climb up the knowledge ladder in terms of developing new products," says Ulltveit-Moe. "But we do have a complete understanding of what oil companies' needs are."

Ultra-deep Voering well hits major gas

Deepwater exploration in Norway is off to a promising start with a large gas find in the first well drilled on newly licensed acreage in the Voering Basin off mid Norway.

The well was BP's 6707/10-1 in the Nyk High area. It was drilled by semisub Ocean Alliance in 1,274 meters of water, almost 800 meters deeper than the previous deepest well on the Norwegian shelf. Gas was found in Upper Cretaceous sandstone at 3,900 meters. The find was not tested but is estimated to hold recoverable reserves of some 40-60 bcm. Traces of oil were found in the water beneath the gas, suggesting that oil was once present but has since migrated. "We're encouraged by what we've discovered," a spokesman commented. "We said there was an 80% chance of finding gas and 25% chance of oil."

The Norwegian Petroleum Directorate said the well had proved the presence of good quality source rock and sandstone reservoirs.

After plugging and abandoning BP's well, Ocean Alliance, which has been upgraded to drill in depths up to 1,370 meters, was due in late July to spud 6305/4-1 for Norsk Hydro in the Ormen Lange area of the Moere Basin. It then returns to the Voering Basin to drill on the Vema Dome for Statoil, not far west of Nyk High, after which it is scheduled to drill on Norske Shell's Helland Hansen area west of Aasgard. BP plans to return to the Nyk High area next year.