May 2001 Vol. 222 No. 5  Offshore

Robert E. Snyder,  Editor

NOIA Annual Meeting highlights

The National Ocean Industries Association (NOIA) held its annual meeting in Washington, D.C., April 1 – 3. The mission statement of this U.S.-based group (Canada has its own NOIA, to confuse things) is "To secure reliable access to the nation’s valuable offshore hydrocarbon resources so that they may be developed, produced and supplied in an environmentally responsible manner." The meeting drew a record attendance of 287, representing the Association’s more than 270 member companies and organizations.

NOIA’s program agenda combined meetings of its numerous working committees with special presentations by government congressional members, committee leaders and other government / industry-savvy experts. Several key issues were discussed, including: 1) December’s Sale 181 off Alabama and Florida; 2) The Bush Administration’s "new" energy policy (not that we ever had an "old" one); 3) FPSOs in the Gulf of Mexico (GOM); and 4) California blackouts, the nation’s wakeup call to energy shortages.

The Eastern GOM OCS Lease Sale 181 scheduled for December was the principal discussion topic. The sale area comprises 1,033 lease tracts covering 5.9 million acres, 50 to 200 miles south of Mobile, Alabama, and Pensacola, Florida, and 200 to 300 miles west of Tampa. Thirty-nine tracts within the sale area are already leased. Florida’s government opposes the sale on environmental grounds, pitting its governor, Jeb Bush, against his brother’s new Administration.

NOIA is helping to put out the message that the additional reserves from the Eastern Gulf are critical to U.S. energy needs, and industry’s record and new technologies make offshore developments environmentally safe. Senator John Breaux (D-Louisiana) said he expects Sale 181 to go forward (the government can hold the sale despite Florida). He says the sale is "essential" and that $2.50 gasoline is a greater threat to Floridians. But Florida may still be able to obstruct individual developments, after leases are granted.

   Energy policy as the basis for Administration recommendations and potential government action is on everyone’s mind. VP Dick Cheney is heading a task force due to put out an Administration policy report in May. Basic premises for such policy are: growing need for affordable energy in the face of increasing demand, declining U.S. oil production, and limitations on making U.S. / world natural gas resources available as electric power, where and when it’s needed.

The electric power shortages in California have served to focus attention on the problem, as the good news / bad news of state and local green-oriented government success in keeping fossil fuel and nuclear power plants out of their areas becomes apparent.

Use of FPSOs in the GOM is expected to be approved by the MMS, following extensive environmental impact studying. Just how such technology will be applied, by whom and where, is still in question. And it is impossible to ignore some adverse repercussions from the explosion and subsequent sinking of the Petrobrás 36 floating production system off Brazil.

Putting FPSOs in the GOM also creates the need for ways to transport the stored crude to shore, as a shuttle tanker fleet does not exist there. How the government applies the U.S.’s Jones Act on newbuild and leased vessels for this purpose is critical. And shipyard representatives say action on this issue is important. Shuttle vessel design, towed-barge possibilities, building of new offshore tanker ports, etc. are issues to be decided.

Some relevant information was presented on the FPSO discussion at the recent Floating Production System Conference in Houston. Oil companies, particularly the majors, aren’t rushing to be first with an installation. And the offloading question regarding Jones Act vessel use is important to international contractors such as Navion, which owns or leases a fleet of 24 shuttle tankers in the North Sea.

Elena Subia Melchert with DOE’s Office of Fossil Energy reported on the Offshore Technology Roadmap (OSTR) for the ultra-deepwater GOM that was published in November 2000 and introduced after Thanksgiving on the Offshore Energy Center’s Ocean Star rig in Galveston, Texas. This and other relevant information about new technologies such as ultradeep formation drilling (e.g., 16,000 ft below the seafloor), etc. can be found on the Web at: www.fe.doe.gov.

At the group’s Board of Directors meeting, current NOIA president, Tidewater Inc.’s Executive VP Richard Currence passed the gavel to the new President, J. Michael Talbert, president / CEO of Transocean Sedco Forex Inc. As usual, NOIA’s seven-member Washington, D.C. headquarters’ staff, led by President Tom Fry – who took over in December from the retiring Bob Stewart – did a superb job of organizing and managing the conference. For more information on the above and many other ongoing programs, look on the Web at www.noia.org.

Stranded gas. Relevant to the consideration of FPSOs in the GOM and elsewhere, Bouyges Offshore announced successful completion of the AZURE R&D project for development of floating LNG facility concepts. Bouyges was leader of a consortium of nine European companies, including M. W. Kellog Ltd., Chantiers de l’Atlantique, Fincantieri, FMC Europe, Gaz Transport & Technigaz (GTT), (30% owned by Bouyges), Bureau Veritas, Registro Italiano Navale and Institut de Recherches de la Construction Navale. Five international oil / gas companies gave technical / financial support to the project: Shell, TotalFinaElf, Chevron, Texaco and Conoco.

This project was supported by the European Union’s Thermie program. Its objective was to address all technical issues to demonstrate that a fully floating LNG chain, from gas well to gas distribution network, is safe and viable.

The 18-month work program called for designing floating liquefaction plants, floating LNG terminals and offshore LNG transfer systems. It included thorough testing of all the key components of the chain. The cryogenic storages are based on a membrane containment system, proposed by Technigaz (a Bouyges subsidiary) and GTT. The project included both steel and concrete hull designs for the LNG FPSO. Comprehensive safety assessments were performed, combining current offshore industry and onshore LNG terminal experience.