Stimulation vessel market surges ahead

June 1, 2006
While an initial examination of this year’s stimulation vessel survey might indicate that things haven’t changed much over the past few years, don’t be fooled: demand is high, and needs keep changing.
Clients want vessels that are flexible, accessible

Ted Moon, Technology Editor

While an initial examination of this year’s stimulation vessel survey might indicate that things haven’t changed much over the past few years, don’t be fooled: demand is high, and needs keep changing. The overall size of the vessel fleet may not have significantly changed over the past several years, but the big four stimulation vessel players are all saying the same thing - more clients are calling, and they are asking for more services in shorter timeframes.

The overall number of 26 vessels is the same as it was last year, with one vessel being decommissioned (BJ Services’Seamar in Brazil) and replaced with a new vessel (Schlumberger’s Pacific Scimitar, operating in the Middle East).

Demand patterns

Generally, vessel operators are seeing the greatest demand for their services in several expected areas, such as Brazil, the Gulf of Mexico (both the US and Mexican sides), and the North Sea. New opportunities are presenting themselves in West Africa and the Middle East. Also not surprising is the uptick in demand in Southeast Asia.

As Nick Gardiner, global operations manager for sand control, Halliburton, says, “Based on new contracts and demand for contract renewals, demand will most likely not fall off soon.”

If vessel operators are to meet this growing demand, they realize that they must become increasingly flexible in their offerings.

More clients require more services

“There are more clients that require offshore stimulation work than there has been even in the recent past,” says James Metson, stimulation vessel business manager for Schlumberger, “and that is primarily driven by the price of the barrel (of oil) and the price of gas.”

While stimulation vessel demand in previous years was primarily limited to major operators with large reservoirs that promised long-term contracts and high returns on investment, the recent trend has shifted.

Smaller stimulation jobs did not traditionally require a vessel, and they had previously been performed from the deck of a platform. As Metson poins out, smaller, platform-based jobs necessitated “sizing jobs to accommodate what could be, rather than what should be, done.” More clients are now requesting boats to perform even small jobs, since there is a larger degree of freedom to size a job as needed with a boat.

While vessel versatility is seen as very important, there are regional restrictions (mainly in the form of reservoir differences) that a vessel must conform to that make moving to another region very challenging. John Daigle, global business development manager for Halliburton, confirms this with his company’s fleet. A vessel deployed in the Middle East to perform acid stimulation treatments cannot be effectively used in West Africa, where the majority of the work is focused on prop-frac treatments.”

Technology needs

As clients demand faster and more flexible response to their stimulation needs, technological advancements keep coming. While the actual stimulation chemistries and delivery options continue to evolve, many vessel owners said that recent advancements have centered on the capabilities of the vessels themselves.

According to Metson, “operators do not want to be slowed down by challenging weather conditions.” This has spurred a need by vessel owners to make their fleets more maneuverable and DP2-equipped, rather than using moored vessels that cannot be easily repositioned or deployed to another location.

Power is a major technology focus with the current fleet of stimulation vessels as well. Ricardo Aboud, business development manager for BJ Services in the Caribbean and Central and South America, says that “It is typical today to have a vessel with over 10,000 hydraulic horse power, and likewise it is typical for vessels to handle pump rates higher than 50 bbl/min.”

Aboud also states that it is increasingly common to see “a higher use of hydraulic systems over pneumatic systems, as the former offers less corrosion than the latter.”

Other vessel owners see stricter regulatory requirements as a major driver for technological change. Halliburton’s Gardiner says that his company has made changes to its fleet to keep up with increasingly complex regulations that concern not only dynamic positioning, but also the prevention of chemical spills and handling of hazardous chemicals.

“We and our customers recognize the need for compliance to regulations, even in areas where those regulations are not strictly enforced.”

Another technology that has found a great deal of growing interest and implementation in the offshore stimulation arena is real-time data delivery. Operators are constantly looking for ways to make informed decisions about their stimulation jobs quickly and to respond rapidly to changing conditions, and real-time systems allow them to do this on the boat. The vessel company that can consistently offer this technology will have a significant advantage over its competition.

An alternative to dedicated stimulation vessels has recently entered the market in the form of Baker Oil Tools’ modular stimulation vessel template (MSVT). The MSVT is not a dedicated build vessel, but rather a modular skid template that contains all the storage, blending and high pressure pumping equipment necessary to perform frac and gravel pack jobs. The skid template can be mounted within 48 hours onto an offshore supply vessel or drilling rig.

The MSVT requires free deck space of 40 ft X 176 ft, and a deck-loading capacity of 1,020 lbs/sq ft. Thus far, only one MSVT has been deployed, to a client in West Africa for a 4-yr contract.

However, Baker is optimistic of the flexibility that this technology might provide to customers. Rudy de Grood, a global product line manager for Baker Oil Tools, says that cost savings are substantial, “as the offshore supply vessel can perform other duties such as moving equipment when the MSVT equipment is removed.”

Regional availability

Speed to meet client demand depends on the particular region of the world where one is operating. As the survey shows, there are currently 12 vessels operating in the GoM compared with only 4 in West Africa. This generally translates to shorter backlogs in the GoM compared to West Africa, provided a vessel is not tied into a long-term contract.

Vessel owners are facing their own availability challenges. Halliburton’s Daigle says that it is mainly logistics challenges that remain a difficulty: “Logistics-wise, there are issues all over the world, getting things (equipment and chemicals) in and out of countries.”

Because vessel operators have seen their costs for crew, chemicals and other stimulation tools increase, they face perhaps the biggest challenge in passing some of this cost on to their clients. The track that many are taking is to emphasize the benefits that a stimulation job can have in terms of increased production.