AOGR - Nihar Associates

JULY 2015
Project success for major player
The Pyrenees development, off the coast of WA, is one of BHP Billiton’s “world class” projects.
BEGINNING production ahead of schedule
was the irst sign that BHP Billiton’s
Pyrenees project would be one of the
company’s most successful.
The US$1.7 billion Pyrenees project,
which the company described as “world
class”, produced its 92 millionth barrel of
oil less than ive years after starting up.
Pyrenees produced 5.7 million barrels
of oil equivalent in the nine months to
March 2015, a rise on the previous year’s
In May, BHP Billiton spun off its
non-core assets into the newly-listed
“A simpler portfolio, focused on our 19
core assets, will retain an optimal level
of diversiication while generating even
stronger growth and margins,” BHP
Billiton chief executive Andrew Mackenzie
One of the assets it retained was
Pyrenees, which has been a core project for
It received approval
in 2007 and
has been producing oil from the Crosby,
Ravensworth and Stickle ields since 2010.
The ields have estimated recoverable
oil reserves of between 80MMbbl and
In the nine months to March, the
company stated that there had been “strong
uptime performance” at the Pyrenees
conventional oil project which was offset by
ield decline at the North West Shelf and
industrial action at Bass Strait.
The project is now in full swing, with
a 34 per cent rise in production in the
second half of last year attributed to new
production wells.
Pyrenees production license WA-42-L
is held in joint venture between operator
BHP Billiton (71.43 per cent) and
Quadrant Energy (28.57 per cent), after
Apache Corporation completed the sale of
its Australian assets in June. The second
production license, WA-43-L, is a joint
venture between operator BHP Billiton (40
per cent), Quadrant Energy (31.5 per cent)
and INPEX (28.5 per cent).
The development is anchored in the
Exmouth Sub-Basin off the north-west
coast of WA. At the time of the project
announcement, the area was described by
BHP Billiton as “an emerging oil province
in Australian waters”.
Pyrenees comprises 24 wells and a
double-hulled loating production storage
and ofloading (FPSO) vessel, which can
produce 96,000 barrels per day.
The facility produces crude oil from
the Ravensworth, Crosby, Stickle,
Tanglehead, Wild Bull and Moondyne
The development is near Macedon in
WA-42-L – which delivers natural gas
to the WA domestic gas market via the
Dampier to Bunbury natural gas pipeline
– and Stybarrow, which is expected to
reach the end of its life in the second half
of this year.
In a testament to one of the company’s
core assets and its history in the oil and
gas industry, last year BHP Billiton signed
an agreement with Pemex to exchange
deepwater expertise, as a result of the
company’s success with FPSOs, including
the Pyrenees facility.
“We have proven we can build projects
better and faster than most operators, and
our offshore facilities have some of the
highest operational uptimes and safety
records anywhere in the world,” BHP
Billiton petroleum and potash president
Tim Cutt said.
The Pyrenees development is expected to
be in production for 25 years.
Moving forward
BHP Billiton is one of Australia’s most
successful global companies, paying the
Australian Government nearly $23 billion
in taxes and royalties last year.
However, the company and the industry
as a whole are experiencing a transition
period in project development.
Despite recent falls in commodity prices,
Mr Mackenzie said he was conident of the
company’s future.
“The reductions in prices we face today
are something our industry and country
has seen many times before and while
this operating environment tests us, I am
optimistic for the future,” he said.
“With each cycle, demand is greater than
the previous one – and continues to rise.”
BHP Billiton recently simpliied its
portfolio from 41 to 19 assets through the
demerger of South32.
“Over the past three years, we have
completed more than US$6.5 billion of
targeted divestments to simplify our
portfolio,” BHP Billiton chairman Jac
Nasser said.
“After extensive consideration, we believe
the demerger is likely to create more value
than other alternatives, including asset
BHP Billiton is continuing to
cut expenditure and increase its
cost-effectiveness in its petroleum business.
Mr Cutt said that while the company
could not control the market, it could
control its own operational behaviour.
“BHP Billiton has a strong focus on
productivity and our petroleum business is
no exception,” he said.
“In our shale operations, for example,
we have lowered our drilling expenditure
by 50 per cent.”
BHP Billiton reported a 9 per cent rise
in group production for the nine months to
March this year “with records achieved for
10 operations and ive commodities”.
The company planned to deliver 16 per
cent of group production growth by the end
of the 2015 inancial year. By the same
time, BHP Billiton’s petroleum business
was expected to produce 255MMbbl of oil
equivalent – a 5 per cent increase on the
2014 inancial year.
Mr Cutt said BHP Billiton had a
“positive outlook” for its operations in the
US, as well as for exploration in Trinidad
and Tobago.
JULY 2015
A proud
engineering and consulting company Nihar
Associates has provided engineering,
operations, maintenance, reliability and
integrity support to a variety of industries in
Australia and around the world since 2003.
Nihar Associates has a wealth of
experience in completing projects for loating
production storage and ofloading (FPSO)
vessels, such as the full safety integrity level
(SIL) assessment it performed on BHP’s
Pyrenees FPSO between 2007 and 2009.
Nihar Associates worked effectively
with BHP, Modec and Toyo Engineering
to ensure the design of the Pyrenees FPSO
met all SIL-related requirements and that
all SIL elements were proof-tested at the
appropriate intervals.
The company performed a thorough initial
design review and conducted a series of SIL
assessment workshops with representatives
from the operations, maintenance, process
and design teams from Toyo Engineering
to assess all sensors, logic solvers and inal
elements, and assign SIL levels.
Nihar Associates also conducted a series
of SIL veriication workshops to assess
whether the inal design and equipment
speciications met the SIL requirements and
performed an on-site, as-built veriication
of the inal design, including modiications
made as a result of the workshop assessments
in Tokyo.
Additionally, the company worked
with Modec to deine the maintenance
requirements for proof testing of safety
instrumented protective devices.
Nihar Associates provide engineering and consulting expertise to a number of industries.