Syncrolift ship currently being installed.
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Blue Ocean Technologies breaks depth record in Gulf of. This project marks the first time that wireline. Buoy Supported Risers installed at. First one, delays in project. CCL currently has Azipod propulsion installed on. Kongsberg Maritime AS has been awarded a Project. Subsea 7 SA's CEO Discusses Q1 2013 Results - Earnings Call Transcript. Nordic Energy Summit Oslo. Guara; Lula; Sapinhoa. The Panama American Portion of title.
Subsea 7 SA : Subsea 7 S. A. Joining us today are Kristian Siem, Chairman of the Board; Jean Cahuzac, CEO; Ricardo Rosa, CFO; and John Evans, COO. Before we start the conference call I'd remind you that certain statements made in the course of this call which express the company's intentions, beliefs and expectations, are forward looking statements. Future results and trends could differ materially from those which are given in such statements. Details of these can be found in the company's filings, including the company's annual reports. With that, I'll pass you on to Kristian. The board met last night and many of you probably ask the question, when they first announced the problems with this project, is this provision sufficient, or will there be more bad news.
You are right that when a project begins to have problems it is often followed by more problems, as we now experience on the Guar. The problems we have experienced recently, however, are new and additional to the status when we last reported on this project. Let me be clear about our information policy. We inform you as timely and accurately as we know of the status as we assess it to the best of our ability. Can the situation deteriorate further; yes, but no more than it can on any project, therefore this is our best assessment at this time. Let me also put the Guar.
I will now ask Jean Cahuzac to give you a summary of the Guar. Good morning, ladies and gentlemen, and thank you for joining us at short notice for this update on the Guar. Much has happened in the intervening period on the Guar. We are experiencing more weather downtime than originally planned due to severe weather conditions in the Santos Basin during the Brazilian winter. We have suffered equipment damage and the resulting downtime on the Polaris due to this bad weather. We expect these conditions to continue until the season is over.
Although we are contractually covered for time spent by the prime vessel waiting on weather, we incur additional costs, both offshore and onshore, which are not covered. In addition, we have taken a more cautious approach in evaluating what can be achieved offshore during periods of calm weather, in view of the complexity of the facts involved.
Second, the stretched supply chain is resulting in delays from international and local suppliers. For example, the daily reschedule of the subsea connectors from Norway and the third and fourth buoys from China has been delayed.
These delays have in turn resulted in additional costs to expedite supplies, additional custom duties and associated taxes, and additional logistics costs. Commercial disputes have also arisen with suppliers, and our costs are impacted by lack of logistic resources available in Brazil, for instance, barges and stuff like that, to be able to meet our revised delivery schedules. Third, there was a delayed start to pipeline fabrication at the Ubu spool- base largely due to customs clearance issues. Initial productivity at Ubu has also taken longer to ramp up than expected, although we are now beginning to see encouraging signs of improvement. The combination of these three factors as we entered the offshore phase has led us to take a more cautious view on timing of the project. We now expect the offshore phase of the project to complete in the third quarter of 2.
A re- evaluation of the offshore risks based on experience to date, and the extended timeline of the project, has resulted in us increasing the estimate full- life project loss by between $2. The Brazil's second quarter net operating income will be impacted accordingly. These costs increase are not expected to result in a reduction in our tax burden for either the quarter or the full year of 2. We continue to make progress on the project with physical progress rising from 4. May. As I previously mentioned, the Seven Polaris and Seven Oceans are deployed on location, and a project team of 2. Rio and Niter. We are collaborating with our client, Petrobras, to ensure a successful outcome from a technical and operational standpoint.
I would like now to talk about the future of Subsea 7 in Brazil. As I have mentioned in the past, we have made mistakes on Guar. The project was awarded in 2. Thereafter, the demand environment improved, the supply chain tightened, and we underestimated the specifics of the Brazilian supply chain market.
The complex tax, customs, and environmental regimes in Brazil, together with a tight supply chain and the challenges of certain Petrobras contractual terms and conditions have significantly increased the risk profile of this project. Lessons have been learned, and we will not enter into such a contract in the future in Brazil. I do expect that post Guar. First, we currently own and operate six Pipe- Laying Support Vessels, the PLSVs. We plan to continue to develop our PLSV business, which operates on a day- rate basis and where we are confident that, we can achieve reasonable margins and returns with an acceptable risk level. We are currently negotiating the renewal of a number of our PLSVs, and as you know, we participated in the tender for new builds.
Second, we expect to remain active in the post- salt with Petrobras for projects with lower risk, with a lump sum in transportation and installation business model, I mean the T& I business. Third, there are EPIC lump- sum projects in the pre- salt, such as the Guar. We will work with our client to ensure successful completion of the Guar.
The loss we expect to recognise in the second quarter reflects a prudent evaluation of the cost and risks associated with the remaining phases of the project. Lessons have been learned, and the mistakes will not be repeated. We will continue to be transparent and update you with material developments, both positive and negative, as we progress towards its completion. When looking at the group results, as Kristian said, I would like to remind you that the Guar. Looking at our market globally, tendering activity remains high and we remain positive about the medium and long term market prospects. So, with that we will take your questions.
We will limit these questions to Brazil and the Guar. I think with that we'll go to Q& A. As a reminder, if you wish to ask a question today, please press star one on your telephone keypad.
If you wish to cancel your request, please press the hash key. So, once again, that's star one to ask a question, and please wait for an operator to take your details. Please stand by while we compile the list. I have a question about the tone of your message this morning; you don't seem to be particularly confident that this is going to be the only additional financial impact you're going to take on this project, so firstly, can you give us a timeline on when you expect to complete this project? And also, my second question is around the previous impact you've taken on this project in the past, and I'm pretty sure that, again, in the past you've said, you know, this is going to be the only hit we're going to take, we're not going to have to take any other, you know, have any other profit warnings on this project. So, really, what has changed and why haven't you been able to draw a line under this project in the years gone past? Our approach hasn't changed; when we look at any projects and you look at the schedule and the various phases under the project, there are really two phases, I mean, you have the engineering, the project management implementation, the preparation for the operation, and then you enter in to operations.
So, on any project, there is risk associated with the operation, and until you actually go to operation, there is a question about what will happen during the critical phase of the project. So, when we looked at the project in the past and we always reported what we had as our best knowledge of the project prior to starting operations, and the previous losses that we had announced was based on this approach.
What happened over the last six weeks is that we are now in the middle of the critical phase of operations; we have experienced a number of problems, as I explained, and we have an updated view on what to expect in the next 1. What we've done over the last number of weeks, driven by John Evans our COO, is review completely the resources which were assigned to the project, see if we needed to react in a different way to the new problems which have been identified, and we've done that. We have reviewed, in a prudent way, the revised schedules in terms of mobilisation of vessels; we have reviewed the potential risk associated with the weather during the winter period, and came to the conclusion that we explained this morning. So, it's a prudent view; it represents how it is the project to our best knowledge today; like on any project, until you have completed the project, there are remaining risks, but it's a prudent approach and an update of the figures the way we see it today. Can I say that nothing else can happen; no, but I would say the same thing for every project, but I'm comfortable that the work which has been done has been thorough enough and detailed enough to give a good view of where we are today. Brazil is limited in terms of resources, and when you have to rearrange a schedule of the project, you need the new barges to move equipment, you have difficulties which relate to the project administration, because it takes a lot of time to change plan, to go through importation, to do the paperwork and all that. So, it's a very complex situation, which is partly due to the problems that the project is encountering, and also to a large extent due to the Brazilian environment.
And correcting these types of problems outside of Brazil would be easier than it is in Brazil. So, to come back to your question, most of the additional cost that we are forecasting to the end of the project are time related and the fact that equipment's now on standby because of the delays, because we have rearrange the schedule.
World Energy News. Proserv Seals Subsea Contract with Premier Oil. Energy services company Proserv said it has been awarded a multimillion dollar contract with Premier Oil for subsea work in Asia Pacific. Proserv will supply a subsea control system and associated equipment for the BIGP (Bison, Iguana & Gajah Puteri) development project, located in the Natuna Sea, Indonesia. The scope of supply is a three well subsea control system, which includes the company.
DSME, Kongsberg Maritime Join Forces. DSME and Kongsberg Maritime have signed a Joint Development Agreement (JDA) for a new LNG FSRU regasification control system. As part of the delivery scope for a vessel currently under construction at the Okpo shipyard in South Korea, DSME will develop a High Fidelity Dynamic Simulator for the regasification plant. The JDA, which was signed on 2. November 2. 01. 6, enables DSME to utilise Kongsberg Maritime. New Control System for Guara- Lula Oil Field.
National automations system provider, Cougar Automation, has developed and commissioned a new control system for Balltec to use on the first Buoy Supported Riser (BSR) system installed on Brazil. The system is reportedly a world. The Guara- Lula project is the largest engineering. Having worked in the subsea industry for over 2.
Theobald will bring considerable subsea control systems knowledge and understanding to the role, as well as an insight into how best to use Seatooth products and technology. Theobald started his career with FSSL (formally Kvaerner Oilfield Products now Aker Solutions) in 1. His core discipline is in subsea control systems. One. Subsea to supply production systems for Zohr offshore Egypt.
One. Subsea, a Schlumberger company, has been awarded an engineering, procurement and construction contract totaling more than $1. Belayim Petroleum Company (Petrobel). One. Subsea will supply the subsea production systems for the first stage of the Zohr gas field, located in the Shorouk Concession, offshore Egypt.
National Grid contract for Wood Group GTSWood Group GTS has secured a $3. National Grid to provide gas turbine icon. The upgrades will be fitted to gas turbines operating at compressor stations located in Cambridge, Diss, Chelmsford and Huntingdon in the United Kingdom. The icon governor control system regulates fuel flow into the gas turbine. The partnership developed after EFC Group selected Siemens as its preferred supplier of automation and control systems in 2. Programmable Logic Controller (PLC) supply, usage and technology. The company, which designs, manufactures, assembles and tests subsea equipment, has invested $1.
Test and Flushing Workshop. These mobile cabins can be used onshore and offshore to carry out pressure- testing, flushing and cleaning of controls pipework. Bifold provides electronic control and positioning systems and expertise for valves and pumps used in hazardous upstream and downstream oil and gas applications, with special expertise in wellhead control systems.
NOV Awards Contract to Pulse for Mooring Line Monitoring. Pulse Structural Monitoring, an Acteon company, has been awarded a contract with National Oilwell Varco (NOV) Arendal in Norway to provide an acoustic mooring line subsea monitoring system to measure mooring line inclination and tension. The contract is for 1. The equipment will be installed in the North Sea. US Govt's Nuclear Watchdog Victim of Cyber Attacks. The U. S. Nuclear Regulatory Commission was .
At least two of the attacks originated overseas, according to the report obtained by Nextgov, a rare public report with details of a cyber attack on the energy sector. The publication said it obtained a copy of a report by the NRC's Office of the Inspector General.