Member Info for ZYX098

It's more like the West of Shetland w.r.t. water depth and weather.

Irrespective, there's always a risk that Helicopter flights could be cancelled due to weather (winds, or Rig moving too much in the Swell).

Given the distance from Mount Pleasant to SL, crew changes being done one one day (due to the charter flight) and for Search & Rescue purposes, they'll have at least 2 and more likely 3 Helicopters based in the FI to service the Rig.

Best description of a Helicopter I heard from a pilot:- "10,000 pieces all trying to fly in different directions at the same time".

The current fleet are much safer and more comfortable than the previous generations, which had nicknames like "the flying vibrator" and "the greenhouse".

These days, Helicopters in North Sea service carry so much more safety gear than their civilian counterparts that it results in a significant decrease in passenger capacity.

Haven't flown in one for quite a while. Will be happy if I never do so again!

As Navitas switched from Bonds to 'conventional' financing some time ago, they must have had at least one Bank on the hook already.

We know that the Bank(s) have been doing due diligence on Navitas for SL for several months already.

Personally, I think putting FID at 90% is being conservative!

Don't forget that Beacon are the Operator on Shenandoah, not Navitas.

As a partner, Navitas actually won't gain much experience in using Subsea 7 (if it is SL they are talking about) or project management or Operating the asset - that's all down to the Operator.

HiramAbiff,

That's just when they expect to have the fifth Well online - not that they expect it to take a year to drill and complete.

Actually GOM Wells tend to drill very quickly for their depth, as it's all soft sediments.

Even with the exceptionally high pressures, they could probably drill in less than 60 days, with the Completion taking another 30 - 40 days. Hook up and testing the flowlines etc, ummmm, maybe another 2 - 3 weeks.

Ovets,

Although it doesn’t get much publicity, there are continuing low grade problems between Spain and the UK over Gibraltar. For example, the Spanish deny overflight rights (against NATO protocols) to any RAF flight that takes off from, or lands in, Gibraltar. On occasion, they’ve even done this to BA flights.

The Spanish Navy also routinely infringes into UK (GIB) waters.

The recent capitulation by HM Govt (a.k.a “EU Reset”) now means that Spanish Customs & Immigration officers are based at Gib Airport (an absolute red line under all previous Govts) and can deny UK citizens entry to Gib if the Spanish think they will go onto to enter the EU.

W.R.T. Argentina, relationships are cordial and appear to be improving. In fact, the FIG and Argentina have been unofficially co-operating for several years over combatting illegal fishing vessels in their waters.

Chances of Argentina invading again? Or instituting a blockade? IMHO, zero.

However, when it comes to investing in the FI, the Majors will be looking at not just the next election, but elections over the next 20 – 30 years and what Govts could come in. They’ll weigh that against the potential of having their Argentinian assets seized at some point in future (I recall Shell have something like $40 Billion, for example) and make the call if it’s worth it.

In my opinion, this potential risk will cause most Majors to steer clear – several of them will have been burnt in similar situations before (Egypt, Venezuela are the ones that immediately come to mind).

In the meantime, the situation does cause very real problems w.r.t. the supply chain to support SL.

For example, for crew changes for both Navitas and the Service Companies, the easiest way would be for all involved to get their people to Buenos Aires and then have a dedicated weekly charter from there to the FI and back. But that could easily be interrupted, so they are looking at a (much more expensive) bi-weekly charter from the UK.

Similarly, materials and consumables will have to be shipped from elsewhere (e.g. The UK, Houston or possibly Namibia / South Africa), rather than being consolidated in BA for onwards shipment.

Also, the Service Companies will have to build and man the facility to service and refurbish their tools in Port Stanley, rather than be able to ship them to Argentina or Brazil for servicing.

HI Cammbo,

Would be great if you can confirm some of my points, but I don't claim to know anything for sure, hence the disclaimers on 'bar talk'!

However, I've been around more than long enough (including running several remote location projects Overseas) to have a fairly good idea of what bar gossip actually means in reality, and also how it should be done - at least from a Drilling perspective. I'm as much in the dark about the FPSO as everyone else.

As far as the FID, both Navitas and RKH have stated they need to raise cash for FID, so in that respect it does depend on lender financing.

Having said that, I am 99.9% confident that the financing will be forthcoming for both Companies (albeit raised in different forms).

Navitas appear to be confident that they'll be ready for FID (sometime in early October, I think) before the FIG are ready to issue the final project approval.

It's actually the FIG that would be my concern with respect to timing.

SL being their first project and the potential rewards to the FI being so great, I think they'll be (understandably) very cautious and want to make sure they get everything right before giving the final approval.

In that respect, I'd be interested to know where they are getting their advice from - purely from HM Govt, or have they also brought in some external assistance?

Ovets,

I'm very confident that nobody from Navitas reads these - never mind someone high up enough in Navitas to do anything about it - presuming the bar talk is actually correct that is!

Hi LTT,

The SFB licenses expire at the end of Dec 2026 (as do BOR's).

IIRC, they've already had a 2 yr extension due to Covid.

Since neither RKH or BOR can do anything with their licenses without someone farming in (did Sam say anything about that at the AGM?), I don't see the FIG being willing to extend any further.

My feeling is they'll want to set up a 2 yearly license cycle, alternating between the NFB and SFB, so they have the potential for a continual pipeline of projects while not over-extending the capability of the FIG to handle all the applications.

Violindog,

You are welcome!

I aim to please, but frequently miss...

Yes, ABZ = Aberdeen.

UKCS = United Kingdom Continental Shelf - a.k.a. the North Sea and West of Shetlands.

Ralph 2010,

Yes, although it depends on the license commitments on the current acreage and how much (if any) Navitas have to relinquish and by what date.

It appears that at least one Company has approached the FIG already, hence the adjustment to the legislation.

What is really interesting is the post a few days ago by.....ummm, apologies, forgotten who it was.... someone that really knew their stuff on Geology.... that had a link to a paper by the BGS.

This paper showed that the open acreage to the North of SL was highly likely to be part of the same province and therefore also highly likely to contain SL look-alikes, so I'm sure that that has got a LOT of attention!

Do a websearch for "Tectonostratigraphy and the petroleum systems in the Northern sector of the North Falkland Basin, South Atlantic" by Darren J.R. Jones, Dave J. McCarthy and Thomas J.H. Dodd and it should come up.

Mogger,

I'd be surprised if they do anything other than adopting a similar approach to that used on the UKCS, in that an additional tax is levied on production which is earmarked for use in decommissioning.

That way even if a Company goes under for some reason, the FI Taxpayer won't be on the hook for the costs of decommissioning the field(s).

Unlike the UK Govts, hopefully they'll keep that cash in an escrow type account and not spend it as soon as they get it.....

Alama / Cambo,

They are already well down the road to contracting a Rig, which they'll need to finalise sooner rather than later even if drilling isn't due to start until late 2026 / early 2027.

As I've posted elsewhere, there's a lot of planning work that needs to be done which is dependent upon the Rig chosen.

Given the potential length of contract, any Rig will likely have to undergo a period of refurbishment and upgrades, as there's nowhere nearby the FI where this could be done during a gap (if any!) in the drilling program.

This would also entail the Rig undergoing it's 5 yearly Certifying Authority (DnV or ABS) inspection, which would undoubtedly need to be done before mobilisation. This is a very comprehensive inspection of all equipment and the hull itself, which often requires drydocking for an older vessel.

Do we know if this meeting is going to be livestreamed?

It will be really interesting to see how the FIG and Navitas will aim to minimise the impact of having a large number (in relation to the FI population) of oil field workers descend on the FI, without adversely affecting things like property availability/prices, while maintaining good relationships with the local population.

Also what the FIG are planning to do with the cashflow - which will be like Niagara Falls compared to the small stream they've had so far. I'm sure they'll be starting a wealth fund (along the lines of Norway), but it still has to be administered and a mechanism established for how the funds will be spent.

LTT,

I think that's why the FIG recently published a regulation update about no longer accepting 'on spec' bids for acreage.

My feeling is that they'll be looking to prepare & open up a conventional licensing round (mid-late next year?) for the NFB once they've got the FID for SL out of the way - in which case it would be interesting to know exactly what the license conditions are for relinquishment on the current blocks.

I suspect they'll then let the current licenses in the SFB expire (due at the end of next year) and start doing a 2 year cycle of license rounds between the NFB and SFB, so they can keep a potential pipeline of projects going while not overloading the capability of the FIG.

This would also give license holders four years to fulfill their work commitments on the licenses they get before they have to commit to the next phase and relinquish the required %.

NastyNick / LTT,

I can see Shenandoah experiencing more teething troubles than you'd typically expect, as it's the first production from a 20k psi field I think anywhere in the World - but certainly in the GOM.

That might mean it may take a little longer to get up to the full expected production rate, especially if they need to order in some specialised equipment (and at 20k psi, it's all specialised upstream of the production choke!).

They've got the Well test information from the Exploration and Appraisal Wells to go by, plus the initial tests on a couple of the producers, so I don't see it ultimately falling significantly short of the anticipated production rates - if at all.

Even if Shenandoah is substantially a failure, I don't think that would stop the FID for SL.

It may delay FID a little, as Navitas may have to get some additional funding, but the project metrics are just too good and too much work has been done for it to fail now.

Continued.....

The Contractor personnel also have a high turnover, as once they’ve gained some knowledge of the project, (i.e. enough to put on the CV), the Contractor moves them onto another project and they get replaced with another ‘green’ hand.

I’m willing to bet the Drilling & Completions and the Logistics staff in particular in the London office are very unhappy with this development.

The more experienced people tend to regard the planning phase as ‘work’ and the Operations phase as ‘fun’.

Having this suddenly taken away from them after a couple of years (what are they going to do now? Work on Phase 2?) will not go down at all well.

For example, given the (very!) remote location and lack of infrastructure, all the ITT’s will have been done with a particular operating & logistics philosophy behind them, which the newbies won’t know and are unlikely to understand.

They’ll also have no understanding of how various decisions have been reached with regards to the Drilling and Completion designs, which so far will have ensured that they meet the requirements of the G&G and Reservoir teams.

Clucking Bell! This makes me mad just thinking about it……

Like I said - really hope it's not true!!

Now, I really hope this isn’t true, as it makes no sense whatsoever and would be a big mistake (the only one so far?) by the Ramsey crew.

It actually falls into two sections;

Firstly, they are going to open up an office in ABZ.

I don’t understand the need for this. Navitas are based in London, as are all the people that they have taken on so far.

If you look at it historically, there are many Companies with exploration acreage in Africa & the Middle East but nothing in the North Sea who are based in London (like RKH!).

This is because they need to be closer to the money men and also the pool of oil field talent in the London area tends to be more experienced (older….) and have years under their belt working Overseas.

ABZ has been declining in this respect for several years, as not only are the people more likely to have only worked on the UKCS, but the ‘great crew change’ and IR 35 have resulted in many very experienced people either retiring or going to work Overseas.

From a planning perspective, it’s much more efficient for the Sr. Management, Geology & Geophysics, Drilling & Completions, Subsurface (Reservoir), Production, Logistics and HSE people to be under one roof, as they need to be talking to each other all the time.

And no, TEAMS calls/meetings just don’t cut it – been there!!!!

I don’t see many of those people - having originally been taken on to work in London - being keen to suddenly decamp to ABZ.

Secondly – and I really, really, really hope that this is not true, as it would be unbelievably stupid – they are essentially going to outsource the remaining Drilling & Completions planning, and all the D&C work during Operations, to a Contractor in ABZ. This is really bad from several perspectives.

You are essentially loading up with more personnel than you need (still need Staff people to look over what the Contractor is doing).

The Contractor people are inevitably less experienced than the Staff people than you have, and they won’t have the same metrics either – the Contractor will be more interested in driving up the head count and maximising their revenue, rather than doing what’s best for the Operator.

The classic way they have of driving up revenue is they have an agreed day-rate with the Operator for each position, then they fill that position with the cheapest person they can get. So you end up with someone that has the title of “Senior Engineer”, when in reality their only experience is 2 – 3 years sitting behind a keyboard in ABZ and they are unlikely to have any Overseas experience, never mind remote location experience.

Remote location experience is absolutely critical here – if you’ve never been exposed to it, you don’t even know the right questions to ask, and if you forget something, it's not going to be on the boat to the Rig tomorrow, and the boat is a lot more than 8 hrs away…

Usual disclaimer – it’s ‘Bar Talk’ so not to be taken as Gospel, but with a big pinch of salt etc etc.!!

The Very Good:

Navitas are apparently confident that they’ll have everything ready internally for FID by late September or early October. They’ll just be waiting on the FIG to issue the final permits, which they expect by late October or early November and then they can announce FID.

The Good 1:

If they haven’t done so already, Navitas are on the verge of signing the major contracts w.r.t. Drilling and Completions. It seems that instead of going out for each Contract individually, they lumped them all into 2 or 3 bundled packages.

This is very common in remote locations and good practice, as it not only cuts down on all the ITT work (on both sides), but also gives the Service Companies a big enough slice of the Pie to be able to support the Operation, even if they only get one package.

Having said that, apparently the packages have been won by just one of the large Service Companies anyway.

The Good 2:

Navitas have 2 – 3 options when it comes to the Rig and have been able to use the potential length of the contract to get good day rates.

Indeed, the phrase I heard was along the lines of “FFS, just make a decision!”, as a lot hangs on the choice of Rig with respect to planning deck layouts and equipment requirements for the various services.

For example, for cuttings disposal during drilling, they’ll either be using ‘skip and ship’ (all cuttings are taken to shore for disposal) or a thermal unit which burns the cuttings into a fine ash which can be disposed of overboard. Either system takes up a lot of deck space and has very specific power / crane requirements.

They are using gravel packs for the Completions, which also requires a lot of deck space and again, has very specific power / crane requirements.

So the Drilling & Completions Engineers will need to work with the Rig Contractor and the Service Contractor(s) on the layout and if they can get both on the Rig at the same time, rather than having to mob and demob for each Well (very time consuming and expensive to do).

As an aside, given where they are, the lack of onshore disposal facilities for Oil Based cuttings and because it’s not weather dependent, I suspect they’ll be using a thermal unit.

Ocelot,

“so many on this board spinning nothing but negatives”

Yet it’s clear that the Realists are the ones using facts, logic and knowledge in their posts - and have an extremely good track record in predicting what will happen with respect to the various pronouncements that UKOG have made over the years.

On the other hand, the Ramptastic crew have an almost 100% failure rate when it comes to predicting what will happen with UKOG. They rarely use any facts (or any that are actually relevant) and logic escapes them. They have no intelligent, reasoned rebuts to posts by the Realists – they just resort to cheap insults, deflection, while exhorting others to filter us.

Ocelot,

"Agreed concerning BB, I was surprised UKOG did not seek a further extension."

Forgotten already?

UKOG did, and it was denied....