New Vessel Gives Malaysian Firm a Lift

Q. What is Sapura Energy’s top role in the Mexican oil and gas industry?

A: Sapura Energy has three main divisions: energy, engineering and construction and offshore drilling, all of which can provide services independently or combined as an integrated solution. The engineering and construction (E&C) division provides full EPCIC capabilities, hook up and commissioning and decommissioning. It was the first division established in Mexico. Three years ago Sapura Energy decided to bring our new vessel, the SK3500, to the country at a time when the oil and gas market had not yet been hit by the low price crisis. The vessel’s characteristics give her the capability to install a large proportion of PEMEX’s future platforms, as well as pipelines up to 60 inches in diameter.

Sapura Energy’s drilling division is specialized in offshore tender assisted rigs (TADs) and owns and operates more than 50 percent of the world’s TADs. In Mexico, we are in the process of studying the advantages of using this technology to reduce mobilization and logistics expenses. We believe that it could be a very cost-effective alternative in the Gulf of Mexico. Finally, the energy division offers its expertise on reservoir knowledge combined with the operation, well management and maintenance of offshore production units.

This mix of services uniquely positions the company to perform integrated projects by having a better understanding of risk allocation and therefore providing our clients with different alternatives and solutions through a cost-effective approach.

Q. What main challenges have impacted Sapura Energy’s entry to Mexico and that of arriving companies?

A: The changes in the international oil and gas market and the implementation of the Energy Reform have created a completely new scenario for the Mexican market. Sapura Energy is working with our clients to provide solutions to support their investment plans. Different alternatives are already in place such as construction financing, longer payment terms, higher project execution risk by the contractor as well as integrated solutions.

Internally, the Sapura Energy group is in the final stages of a transformation and restructuring process to increase efficiency. In addition, the Sapura Energy fleet has an average age of less than 8 years. The SK3500 is a new vessel that can perform different offshore construction activities, providing vital flexibility to the client and their needs. The Energy Reform resulted in an opening of the market to new players but the winners of Round One are still three to four years away from executing their development plans and opening work for offshore construction. Sapura Energy is already in discussions with the new companies to understand their plans for the development of their fields.

Q. What key capabilities led to Sapura Energy winning the Ku-Maloob-Zaap pipeline project?

A: In 2015 Sapura Energy won its first contract with PEMEX. The performance of this contract had minimum deviations from the original plan and it was successfully completed and administratively closed within the contractual terms. In almost six months, the SK3500 installed four structures, including the Kuil-B top side with a lift weight of 3,200 metric tons, in addition to 20km of pipelines with diameters of 24 to 36 inches. This successful execution provided both PEMEX and Sapura Energy with the confidence that we have the resources and capabilities to perform work for the NOC in accordance with the contract requirements. The KMZ pipeline 76 scope consisted of the procurement and construction of 36 inches by 18km in length, from the E-KU-A2 platform to the CA-AJ-1 platform.

It was a complex project due to the pipeline’s size and congestion in the area. These challenges required the best available resources. With this in mind, Sapura Energy provided a competitive proposal with the most advanced vessel in the region to perform the work. As a result of competitive pricing the SK3500, our qualified and experienced project management team and the financial capacity of the company we won the KMZ-76 project.

Q. What have been the highlights in the construction of the KMZ pipeline?

A: KMZ-76 was a challenging project because of the strict time frame set by the client, spanning six months. We deployed an array of operational strategies to deliver the project on time. Challenges arose when working between two flare booms at the Akal-J complex, which required the use of a specific and powerful vessel. Not available from any other company on the market, we decided to use the SK3500 because of her powerful thruster capacity, which allowed us to keep position and work under weather conditions that other vessels would have been unable to withstand. In the laying of the pipe we put together an integrated team using our own specialists from Asia and working together with a long-term partner to provide the automatic welding equipment and the NDT services. Our planning process allowed us to lay up to 138 joints in one day, one of the best performances in the field for a 36-inch pipeline. In terms of health and safety performance, which is our main objective, we carried out the project with more than 1.5 million man-hours, zero accidents, multiple work fronts and a challenging environment.

Q. What are the main opportunities here, particularly in the deepwater segment?

A: In the long term Mexico has great prospects in deepwater and we are looking forward to those projects reaching the development phase. Sapura Energy has six flexible pipelay vessels working in Brazil in water depths of up to 2.5km. This invaluable expertise will be brought to Mexico to support our clients. Since Sapura Energy’s experience and capabilities are specific to the offshore industry we believe that our operations will be centered around the Campeche Bay with some opportunities in the northern section of the Gulf of Mexico.

Q. How important will Mexico be to Sapura Energy’s Latin American portfolio?

A: The group has offices in the US, Mexico, Trinidad and Tobago and Brazil. In Trinidad and Tobago we have a tender rig that was working for one major operator. In Brazil we are operating six vessels laying flexible pipelines in deepwater. Mexico will be the main market for expansion of the SK group in Latin America, not only because of the number of projects that PEMEX still has to develop but also because the Energy Reform has opened the market for new players and investors.

Mexico has large exploration potential in shallow water and deepwater. We have an operations office in Ciudad del Carmen where we have created an integrated group of professionals in all the required disciplines using highly skilled Mexican nationals as well as foreign personnel.

Q. What type of alliances does Sapura Energy hope to create in the Mexican market?

A: It is Sapura Energy's core policy to employ as much local content and national personnel as possible in the countries where we operate and Mexico is no exception. We strive to attain strategic alliances with services companies in areas such as engineering, fabrication, diving operations, NDT and support vessels. We believe that Mexico has a lot of talent in offshore shallow water and we will leverage this experience in the execution of our projects.