Living on the edge

Of the world's vast offshore rigs, each has hundreds of workers onboard who keep production going.
Living on the edge
By Administrator
Sun 27 Jul 2008 04:00 AM

Accommodation quarters for the offshore oil and gas industry are in peak demand. Oil & Gas Middle East sees the latest offering from Specialist Services head out from Abu Dhabi.

From the generic aerial photographs of the vast offshore rigs and installations that work in all the world's oceans, it is easy to forget that each and every one is teeming with dozens, sometimes hundreds of workers onboard who keep production flowing.

The living quarters attached, or on stilts nearby, are vital and integral parts of the infrastructure, and when housing workers in such close proximity to hydrocarbon production facilities, safety is paramount.

With new offshore field developments springing up all over the world, drilling rigs and platforms are in record demand, and with it the associated accommodation units. Specialist Services is a UAE-based company dedicated to providing such housing and control room facilities for the oil and gas industry.

With operations split between Dubai and Abu Dhabi, the company has been able to capitalise on its location, serving not only the region's booming offshore sector, but by also straddling strategic global shipping routes, enabling efficient export to key hydrocarbon markets.

For over 25 years the firm has grown from a core team of five employees, to number over 1,500 in 2008, and a client list that is as rich in Middle Eastern customers as with those from other regions.

Project focus

The company hit the headlines recently with the load out of a 700 tonne accommodation module for ConocoPhillips, destined for Indonesia's North Belut oil field. "The accommodation unit was fabricated in the Mussafah industrial park in Abu Dhabi in just 16 months and we are proud of the fact we loaded out in May on schedule, on budget and within strict weight guidelines," says Colin Forster, project director for Specialist Services.

The 58 man offshore living quarters project included the full engineering, procurement and construction phases for a unit that will eventually dock with the North Belut Central Processing Platform (CPP), under construction by J. Ray McDermott.

The North Belut CPP Platform is a complex integrated deck, weighing in at approximately 13,000 metric tonnes, and is being built at J. Ray's construction facility on Batam Island, Indonesia.

"Because the unit is being loaded directly onto a processing platform, stringent fire, weight, and safety standards were paramount for the accommodation structure and interior," explains Forster.

The external bulkheads of the unit had to be jet fire and hydrocarbon rated with blast doors and windows, to provide a protective barrier for those living and working within the module.

In order to keep the weight down a stressed skin structural design was implemented, and a combination of lightweight materials such as GRP bathroom modules, lightweight furniture, and an aluminium helideck.

The unit began its 5,000 mile journey to Batam at the end of May.

Industry watch

Living quarters on board offshore installations vary hugely in size, and in their internal environments.Finding the right design and specifications is achieved through a close dialogue with the fabricators and end customers.

"The requirements can differ greatly depending on the needs of the customer. Specification for leisure facilities in crew living quarters depends largely on the budget of the company involved. Of course, if you want to keep morale high onboard a platform then there is a requirement to provide adequate amenities. In the past we've fitted everything from standard gym equipment right through to squash courts," says Forster.

Despite the increasing digitisation of the platform environment, the number of people needed on board has not been significantly reduced in recent years. "We've not necessarily seen a downward trend for the number of people needing to be housed on rigs, right now we are constructing a unit bound for India that will house 240 men, which is still considered fairly standard for a large facility."

Due to the current oil price environment the demand and cost for newbuild rigs has spiked worldwide.

"The level of the oil price is possibly encouraging owners to open up old wells, or investing in platforms that they may not have invested in before because of relatively low yield, at over $120 a barrel, those smaller wells or fields are now viable," says Forster.

Whilst fabricating accommodation units from scratch is ideal, the waiting lists for brand new facilities are driving oil companies to upgrade and improve existing facilities.

"There is a lot of investment going in to older platforms, and for us that means refurbishment work. Lead times are now very long for new build rigs, so refurbishment is a massive industry in itself now. Regionally, ADMA OPCO are refurbishing a big portion of their fleet right now, and we've been working with them to replace all of the fire and blast doors."

The market is booming worldwide, and the boom in demand for reconditioned and new accommodation units is taking Specialist Services to emerging and developed markets alike, says Forster.

"What we're seeing more now is a lot more enquiries and more tenders to bid for. There are more projects in all oil producing arenas. Just recently we've fabricated control room facilities for AGIP destined for the Caspian, we've got ongoing work and tendering more throughout Asia, of course, that's in addition to the local Middle Eastern market."

Global view

Forster says the company is inundated with enquiries from oil companies developing fields in Asia. "Right now we're building a living quarters for Chevron in Thailand. We're building that one here in the UAE, but the last project we did for Chevron we built in Thailand."

With the pressure on Middle Eastern yard space, and the enormous logistical hurdles posed by moving accommodation units across blue water, Specialist Services has embraced opportunities to build close to the end users.

"We don't restrict ourselves to building in one particular place and sending it across the world. We will go and build it as near to the field as possible. The design and supply of materials may come from Dubai; but our supervision will travel to the yard and build it with the help of local labour, wherever we're asked to go."

Being this flexible geographically is key to remaining competitive. Shipping a unit of this size can cost in excess of a million dollars, so if a saving can be made by building it in a different locality, that is what will drive our decision process.

"Labour costs, and the cost of living in the Middle East have risen dramatically in recent years. It used to be a cheap place to get things fabricated, and it is still a competitive environment, but its not as comparably cheap as it once was," observes Forster.

"Chinese companies are entering the market now, building rigs and platforms, so we have to adapt and compete with international market prices."Manufacturing for Chevron in Thailand was an ideal situation for Specialist Services. Because labour costs were lower, and also a local workforce can return home after their shift, as opposed to requiring housing by the company.

Commodity run

As institutional investors have turned from banking stocks, and demand from emerging markets remains strong, the run on global commodities has had an unavoidable knock-on to the oilfield service providers.

Much of the structure in accommodation units is fabricated from steel and aluminium, and sourcing both puts suppliers in direct competition with many burgeoning industry sectors.

"Certainly China has been buying up a lot of raw materials as part of its industrial and export expansion, as well as soaring domestic demand, which is forcing global prices up," says Forster.

"Commodity price increases can hurt because as the trend has continued upwards throughout the course of building a unit, we've committed to delivering that at a fixed price. That delivery price won't change because the raw materials have increased in cost, so it's something the project, and we as a company, have to absorb."

However, Specialist Services has managed to insulate itself from sudden market fluctuations because, unlike other fabricators, it makes all of our own materials. "Everything from the blast doors and firewalls, blast windows, interiors and furniture, and the wet units (bathrooms) we fabricate all of those goods in Mustafa in Abu Dhabi and Al Quoz in Dubai."

From these sites the company can export the goods to whichever yard it's working in worldwide. "This is a great asset, and it means we're more in control of our own destiny."

The future

With the market in full swing and growth expectations bullish, Forster says the company are focussed on building on its strong position. "Of course we have an ambitious business plan and we aim to grow the company at 20% per year. There's more work out there, and we want a part of it."

However, whilst such expansion in the current price environment may seem quite realistic, it does present challenges of its own to the company. "Getting project managers in is very hard at the moment, and that's where growing by a fifth year on year is a significant challenge," adds Forster.

With major companies returning as regular customers, and the industry extolling the major opportunities presented by offshore development, the company is expecting to be operating at full throttle for the foreseeable future.

JARGON BUSTER: Jet fires

A jet or spray fire is a turbulent diffusion flame resulting from the combustion of a fuel continuously released with some significant momentum in a particular direction or directions. Jet fires can arise from releases of gaseous, flashing liquid (two phase) and pure liquid inventories.

Jet fires represent a significant element of the risk associated with major accidents on offshore installations. The high heat fluxes to impinged or engulfed objects can lead to structural failure or vessel/pipework failure and possible further escalation. The rapid development of a jet fire has important consequences for control and isolation strategies.

"With the disaster in the North Sea, at Piper Alpha 20 years ago, significant changes were brought in to protect rig workers. The knock-on from Piper Alpha was that jet fires and hydrocarbon fire safety scenarios were looked at, and the protection upgraded significantly, so there have been evolving changes in the industry," says Forster.

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