A new industry emerges

The large frame agreements recently signed on aftermarket services gave momentum to a new industrial development. More professionalism and engineering shall solve the challenges that aging subsea fields offer. Also local subcontractors must join the process.

Published: 8 March 2013

Through the framework agreements with Aker Solutions and FMC Technologies, Statoil has secured access to aftermarket services for a long time. The contracts have a time limit up to 14 years. If Statoil make use of all options, the vendors then will provide aftermarket services until 2027.

To Statoil it was important to establish a long term relationship with Aker Solutions and FMC Technologies.

- Today fast track development typically lasts up to three years, while lifetime of the field itself lasts up to thirty years. It is important then to have organizations that can provide these services throughout the whole lifetime. Therefore, these organizations must also have the opportunity to build and maintain skills and knowledge, Ove Magne Kallestad says. He is Vice President Subsea Technology & Operations at Statoil and board member of NCE Subsea.

Globalization

The groundbreaking agreements will also likely affect the international market.

- Statoil is a global leader in this field and there are good reasons to believe that other oil companies will follow their trail. This means that subsea aftermarket services globally will be a rapidly growing segment, Trond Olsen says. He is CEO at NCE Subsea.

A constant stream of new discoveries in Norway and elsewhere, will further increase the demand for aftermarket services.

Kallestad is convinced that both FMC Technologies and Aker Solutions in long term will profit from building up their organizations within this field.

- The contracts draw a long term cooperative model which will benefit the vendors in the international markets. Hence, maintenance work may very well be demanded from in future. Obviously IOR will be an expanding business internationally.

Australia eager to learn

The subsea cluster at Ågotnes has certainly created awareness among global oil and gas players. When Trond Olsen recently was in Australia, he met the continent`s largest operator, Woodside.

- Australia has a young subsea infrastructure and has therefore not yet met the challenges due to maintenance. But they are surely aware the challenges will come. Therefore, Woodside at this year's UTC-conference in June, will visit Ågotnes to see how we organize aftermarket services.

The industry matures

Industrial development matures business in many ways. According to Kallestad, one of the challenges so far in subsea market, has been to deliver equipment “on time and quality”, for instance when equipment on seabed is upgraded. This applies especially when old equipment is upgraded and new requirements has been introduces. He hopes that good solutions can be invented by the industry within this field.

Kallestad also hope the industry manages to reduce the difference in recovery between subsea wells and wells that are operated from topside. A large share of the 500 subsea wells at the NCS, were drilled in the early eighties at fields that in present days clearly are in tail phase.

- Now we work to expand the fields` tail and for a large number of them we succeed to extend lifetime, Kallestad says.

Life Extension Troll

Aker Solutions sees two factors that will boost turnover ahead.

- Firstly, lifetime of Troll field is extended from 2015 to 2030. With regard to life time extension, Aker Solutions will contribute to upgrading the wells. Work will comprise of pulling up christmas trees for maintenance and then installing them again, Arne Riple says. He is Vice President of Aker Solutions Lifecycle Services and board member of NCE Subsea.

Riple estimates the work will last for 5-6 years.

He believes life extension at Troll not only is important to Aker Solutions, but for the entire nation.

- It is of national interest that the lifespan of Troll is extended by fifteen years. This means more jobs for the industry and increased oil revenues for government.

Work over and intervention

- The second factor that will boost our turnover is services related to work over systems and intervention on subsea wells. Well intervention is important to increase recovery of the subsea field, he explains.

Riple sees a rapidly growing market for intervention services in the coming years.

- Growing maintenance of subsea fields implies more these services.

He says Aker Solutions both own intervention vessels and also hire such vessels with Aker Solutions equipment installed.

A new phase

According to agreement FMC Technologies, will provide services within maintenance, modification, repairing and recertification of subsea tools. The agreement also covers work on rigs.

Ingmar Westervik, who is director of FMC Technologies Customer Support at Ågotnes and board member of NCE Subsea, predicts an exciting development on the engineering side of the aftermarket.

- We will in future, demand greater engineering skills. We have today reached a stage where aftermarket and life of field services such as upgrades and modifications, will evolve greatly.

More engineering studies

He points to the fact that North Sea has the largest base of christmas trees installed.

- Nowhere are there so many trees as in the North Sea. They are the oldest too. Therefore, in addition to aftersales services such as upgrades and modifications, there will be a great need for analysis and studies on how to resolve these challenges.

FMC Technologies already installed subsea equipment back in 1990 at Statfjord, “the mother of all Norwegian fields”, which now will produce until 2030.

- Due to these challenges, engineers must study and analyze how to upgrade older equipment and what kind of new equipment is needed.

Want subcontractors to join

Also Westervik sees an increase in aftermarket activity, both at home and internationally.

- A broad analysis indicates a stable installation activity in North Sea ahead. However one expects the aftermarket to grow. In West Africa we will see large installation projects be initialized. In addition, some fields in West Africa are already so mature that aftermarket services are demanded.

Thus he sees a growth on the aftermarket side for FMC Technologies, both in Norway and internationally. However to handle global growth in a good way, he would like to have subcontractors on the team.

- Closeness to suppliers is important to us, also in the international markets. Competence, capacity and timing, as well as the requirement of local content, are reasons for this. May be NCE Subsea could facilitate a process which lead to more establishment of local subcontractors for instance in West Africa, he asks.