Growth ahead

The Asia-Pacific region offers an extensive largely untapped deepwater area that many believe will be a major source of energy for the energy-hungry economies of India, China, and all of Southeast Asia. Oil production in the Asia-Pacific region is expected to increase from 3.48 MMb/d in 2003 to 6.7 MMb/d in 2009, a jump of 92.3%, according to forecasts by MacKay Consultants of Scotland. Gas production is expected to increase 124%, from 151 bcm in 2003 to 339 bcm in 2009.

The region is expected to claim about 35% of global offshore drilling in 2009, up from 30% in 2003, says Mackay. Total offshore capital expenditure can be expected to increase by $9.8 billion from 2003 to $30.6 billion in 2009. In her report starting onpage 28, International Editor Pam Boschee looks at this dynamic and growing region and what to expect in the near future.

Surprisingly, Korea is reopening its doors to western oil companies for exploration licenses. AsJeremy Beckman, Editor Europe writes in his investigation beginning on page 34, the Democratic People’s Republic of Korea (DPRK) recently signed an agreement with the London-based independent Aminex.

The acreage awarded is the most extensive offered to date to one company, covering the entire West Sea basin in northern Korean waters, part of the East Sea offshore basin, and three onshore basins.

Over the past decade, foreign oil companies have gotten smaller concessions, only to leave after limited work programs. Most were frustrated either by limited funds or the large scale of data gathering required to build-on from earlier exploration by Korean institutes and Soviet contractors. These exercises, which were conducted mainly in the 1980s and early 1990s, suggested strong potential for offshore commercial hydrocarbon discoveries, particularly on either side of the mainland.

Now, however, the DPRK is making a concerted effort to foster new activity to ease the country’s energy crisis. Assuming the seismic program proceeds as planned, Aminex hopes to be in a position to drill its first well in West Sea by the end of 2006, followed perhaps by a well in the East Sea six months later.

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Singapore-based Keppel FELS is cashing in on a seemingly endless wave of new orders for offshore drilling and production units. Business has been so good through the first nine months of 2005, in fact, that the company’s seven yards that specialize in offshore construction (of 17 total worldwide) are near capacity and still receiving inquiries.

Keppel currently accounts for more than 60% of all jackup rigs on order (19 of 30), with a contract backlog for the Offshore & Marine division of $4.7 billion. The company sees itself on track for another year of double-digit growth.

Basic to its growth, saysMichael Chia, executive director of Keppel FELS, are new design development and streamlined construction methods that deliver high-performance rigs - jackups, semisubmersible, spars, FPSOs and TLPs - quickly and at competitive rates. Our report begins on page 42.

The FPSOMunin was modified, mobilized, and put into operation on the West River field, offshore China, to continue production while the field’s permanently moored FPSO was in dry dock for essential maintenance. The project was unique in that the Munin relies solely on its dynamic positioning system for station keeping during production, while also offloading to conventional non-DP off-take tankers.

In an article beginning onpage 54, Hielke Brugts, Mireille Soeters, and Max Krekel of Bluewater Energy Services BV discuss how the Bluewater team helped modify and install the Munin and demonstrate the flexibility of the leased FPSO concept, both technically and commercially.