Industry innovation rising to meet the Oil Price Mirage – AOG Conference 2017

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Last week, the annual Australasian Oil and Gas (AOG) conference took place in Perth, Australia,  It was an ideal opportunity to take the temperature of the current industry outlook in this part of the world.

Despite the reduced number of exhibitors and attendees on previous years, the temporal waves of panic from 2015/16 were replaced with a steely outlook of “the worst is behind us” in a spark of returning confidence. Companies having survived initially by trimming budgets are increasingly adopting an innovation mindset of “what worked previously may not apply now”, in a price environment that seems to have settled around the ‘new normal’ of $45-55 per barrel.

Analysts indicated $60 oil as a key tipping point fuelling additional spending on E&P activity while replacing gas reserves for LNG contracts in China and South Korea will remain a key driving force in Australia.

One area which may be of particular industry to our Drilling community, was a renewed focus on supply chain efficiencies and collaboration. A stream of the conference was exclusively set aside to share thoughts on this topic.

According to Wood Mackenzie a leading industry advisory specialist,  sanctioned projects for 2017 globally will double that for 2016. These approvals will generally apply to projects running at averages of just US$7 per barrel in capital costs as opposed to US$17 per barrel for 2014 projects.

These projects have a forecast IRR of 16% up from an IRR of 9% on 2014 projects (IRR is internal rate of return and is basically the interest companies earns on the money they invest in these projects).

Australia has been identified as one of the leading locations in the word for improved oil and gas expenditure. Australia’s strong LNG position is a catalyst for increased spending. Recent major discoveries at Phoenix South and Roc off the Northwest Coast of WA are also interesting blinks on the oil and gas radar.

Chevron’s proposed drilling campaign in the Bight Region and BP’s hunt for a new major gas field at the Ironbark Prospect all point towards a renewed buzz of interest for deepwater prospects.

Other projects are Greater Flank Phase 2, Greater Enfield, Gorgon Stage 2 and Waitsia Phase 2 all approved or in the process of getting the go ahead.

An increase in rig tenders also points towards increased activity that should lead to an increase in the number of rigs from its current 5 to perhaps 7-8 rigs at the end of the year and beginning of 2018.

All in all good news and a more positive atmosphere than the last couple of years with some tangible light appearing at the end of the tunnel.

Share your thoughts or feel free to get in touch at Martin.Flojgaard@rigforceglobal.com or +618 9389 2800.

 

From Deckhand to Dynamic Positioning Officer: a Rigforce career story.

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Ever looked at someone working offshore and wondered how they got there? This month we spoke to Assistant Driller Matt Smith, one of our crew aboard a Jack-up drilling rig.

Matt’s career has taken him all over the world, and we chased him up at home in Port Lincoln to ask him about the journey so far.

What were your first steps in your offshore oil and gas career?

I took the initiative to knock on some doors…

I had a strong background in the marine and aquaculture industries with Australian Fishing Enterprises (AFE), and I’d worked my way up to Skippering while completing my Master 5 and then my Master 4.

I spoke to some people in the know about the pre-requisite courses I needed and took a few weeks off in 2007 to travel across to Perth and do my BOSIET, Rigging and Dogging, and STCW95. I took the initiative to knock on some doors, and was lucky enough to be offered a roustabout position with Diamond straight off the bat. I first went out on the Ocean Epoch, then transferred onto the Ocean Shield, a new build jackup (subsequently acquired by Ensco).

What sort of career aspirations do you have? What sort of goals have you set?

Ultimately, I’d like to be drilling within 6 months of the rig coming to Australia. I’ve been an Assistant Driller now for close to five years and I feel like I’m ready. I’d also like to link my background in the marine industry with the drilling industry. I’d love to qualify as a Dynamic Positioning Officer (DPO), and be involved in either a DP drillship, or DP semi.

Matt at Cyberchair Fundamentals training in Houston Texas in 2014

What was your first assignment like with Rigforce? How did it fit into your overall career goals?

I was first approached by Rigforce regarding a temporary assignment in Dubai. My dealings with Rigforce just seemed to be effortless in terms of organising my travel. They kept up constant contact while I was on board to see how I was going and if I was happy.

How did your first assignment with Rigforce transition into your second?

From my assignment in Dubai, I was offered the ongoing Assistant Driller position on the new build rig due to come to Australia. I never felt as if I was being dictated to; there were a lot of open questions and I always felt like I could contact anyone at Rigforce at any time and get an answer, if not in an hour, then within the day. I was never waiting for emails or phone calls, or left wondering what was happening.

How has Rigforce helped in your career development?

There’s a lot of support and a genuine care factor, not only for myself but the rest of the Rigforce crew. It’s stood out to me that Rigforce are trying very hard to ensure that the quality of the people they recruit is going to reflect their business and put them in a good light. I guess I already feel like I’ve been a part of the company, even though it’s been a relatively short time. I genuinely feel like these questions – what are my career goals? where do I see myself in future?- I’ve never been asked before. It always felt like I was sort of chasing it on my own and not moving any further down the path I wanted, or getting any closer to my broader goal of the DPO. Now I feel like I’ve got a partner there with me looking at that next step ahead, at my next career move and what I need to do to get there.

How do you view the relationship between yourself and Rigforce?

I find Rigforce extremely honest. I find it personal and I find it genuine.

Fantastic. It’s the first time that we as a family have ever received a Christmas card from a company – and not only that, it was handwritten! Things like that, and an email here or there from Dan prior to Easter, just little things like that make a big difference. I find Rigforce extremely honest. I find it personal and I find it genuine. I find that they have done a lot more in a short space of time for the overall employee base than I’ve ever seen before, little things like providing extra rig wireless access points for crew during ramp up (in Singapore), taking that upon themselves to try and better the situation for everyone. They are always pretty forward in terms of communicating any sort of issues with payroll or crew changes. You can basically get an answer from anyone that you talk to, an honest answer the same day. And as an important aside, I couldn’t do what I do without an amazing support network through my family.

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Rigforce communications are intended to provide general information and commentary and should not be taken as professional or legal advice.