The founder of Unmanned Production Buoy Limited (UPB), the Scottish company preparing to develop marginal fields using the world’s first viable unmanned mini floating oil production system, signs at 09.00 GMT today (November 4) an MOU in China that will lead to the manufacture of 100 buoy shells and other components.
The 10-year Chinese arrangement has an anticipated contract value of $4billion (£2.5 billion).
Although significant, the firm predicts that 70% of each UPB unit’s construction spend will be with European suppliers, many of them in Scotland where assembly will also take place.
The implication is that this technology will spawn a £multi-billion business opportunity for Scotland. It is believed that the main plant will be located on the Firth of Forth or at Nigg on the Cromarty Firth.
UPB’s founder and chairman Richard Selwa, with Scotland’s First Minister Alex Salmond present, signs the memorandum of understanding with China’s Offshore Oil Engineering (Zuhai) Co. (COOEC), which is located in Zhuhai, which is in turn next door to Macao and a brief ferry ride from Hong Kong.
Offshore engineering contractor COOEC owns a fabrication yard of more than 2million sq.m in Zhuhai and is where the buoy shells plus other components are to be series manufactured.
The objective of the MOU will be to develop a commercial and technical framework to ensure consistent future production of 100 UPB shells, components and services at COOEC.
It signals a huge and tangible step in Banchory-headquartered UPB’s drive to revolutionise tail-end production from mature oilfields and development of marginal mini-fields that would otherwise be rendered non-commercial if conventional approaches were to be applied.
The plan is to manufacture buoy shells in China and then bring them back to Scotland where a major facility will be established to assemble and test the buoy once the initial three units announced recently have been built in the UK and deployed offshore. That programme alone is worth more than $1.2billion (£750million).
However, 100 production buoys may be only the start for UPB as its system has the potential to become the maritime equivalent of the ubiquitous onshore “nodding donkey”.
“This is an important step in implementing a mass manufacture capability which will guarantee quality and meet our obligations to partners worldwide,” Selwa told Energy.
Scheduled to speak at the signing, First Minister Salmond said: “The opportunities for growth in the oil and gas sector in China are significant and form a central focus of the trade mission I am leading to Beijing and Hong Kong and my government’s China Strategy.
“The deal (being) announced today by Unmanned Production Buoy shows exactly the type of specialist engineering expertise that Scotland is well-placed to export to this growing market.
“This is a long-term project, with a 10-year plan in place for UPB’s technical components to be manufactured under licence in China, with expansion in this market expected to help generate further worldwide sales.”
Selwa added: “UPB is delighted to be entering into this long-term strategic relationship with COOEC (Zuhai). This is a crucial step in achieving our vision of mass manufacturing a high quality, low-cost marginal field production system.
“This agreement with an international conglomerate operating throughout the world, alongside the recent MOU signed with Amec, further demonstrates the rapid transition of UPB’s vision from concept to delivery.”
UPB is an oil and gas development and production company which holds North Sea licences plus it has developed the buoy system.
For small, marginal oil fields, there is currently no stand-alone solution that allows economic production. Existing methods are too expensive and require large field sizes to recoup development costs.
The UPB System addresses this industry-wide, global problem where average field size is decreasing and production rates are declining. It is expected to unlock offshore oil fields containing 2-15million barrels of recoverable reserves.
COOEC’s role will be to begin deliveries of the UPB shells and components in about four years.
This fits into the Banchory firm’s customer delivery commitments beyond the first three UPB units.
UPB’s European development programme includes final engineering of the UPB system, construction of the first three units and development and subsequent production from a total of six oil fields across the UK (UPB-1), Ireland (UPB-2) and Denmark (UPB-3). As indicated above, the total cost of UPB’s European programme is estimated at more than $1.2billion.
China’s Offshore Oil Engineering Co is controlled by China National Offshore Oil Corporation (CNOOC).
The founder of Unmanned Production Buoy Limited (UPB), the Scottish company preparing to develop marginal fields using the world’s first viable unmanned mini floating oil production system, signs at 09.00 GMT today (November 4) an MOU in China that will lead to the manufacture of 100 buoy shells and other components.
The 10-year Chinese arrangement has an anticipated contract value of $4billion (£2.5 billion).
Although significant, the firm predicts that 70% of each UPB unit’s construction spend will be with European suppliers, many of them in Scotland where assembly will also take place.
The implication is that this technology will spawn a £multi-billion business opportunity for Scotland. It is believed that the main plant will be located on the Firth of Forth or at Nigg on the Cromarty Firth.
UPB’s founder and chairman Richard Selwa, with Scotland’s First Minister Alex Salmond present, signs the memorandum of understanding with China’s Offshore Oil Engineering (Zuhai) Co. (COOEC), which is located in Zhuhai, which is in turn next door to Macao and a brief ferry ride from Hong Kong.
Offshore engineering contractor COOEC owns a fabrication yard of more than 2million sq.m in Zhuhai and is where the buoy shells plus other components are to be series manufactured.
The objective of the MOU will be to develop a commercial and technical framework to ensure consistent future production of 100 UPB shells, components and services at COOEC.
It signals a huge and tangible step in Banchory-headquartered UPB’s drive to revolutionise tail-end production from mature oilfields and development of marginal mini-fields that would otherwise be rendered non-commercial if conventional approaches were to be applied.
The plan is to manufacture buoy shells in China and then bring them back to Scotland where a major facility will be established to assemble and test the buoy once the initial three units announced recently have been built in the UK and deployed offshore. That programme alone is worth more than $1.2billion (£750million).
However, 100 production buoys may be only the start for UPB as its system has the potential to become the maritime equivalent of the ubiquitous onshore “nodding donkey”.
“This is an important step in implementing a mass manufacture capability which will guarantee quality and meet our obligations to partners worldwide,” Selwa told Energy.
Scheduled to speak at the signing, First Minister Salmond said: “The opportunities for growth in the oil and gas sector in China are significant and form a central focus of the trade mission I am leading to Beijing and Hong Kong and my government’s China Strategy.
“The deal (being) announced today by Unmanned Production Buoy shows exactly the type of specialist engineering expertise that Scotland is well-placed to export to this growing market.
“This is a long-term project, with a 10-year plan in place for UPB’s technical components to be manufactured under licence in China, with expansion in this market expected to help generate further worldwide sales.”
Selwa added: “UPB is delighted to be entering into this long-term strategic relationship with COOEC (Zuhai). This is a crucial step in achieving our vision of mass manufacturing a high quality, low-cost marginal field production system.
“This agreement with an international conglomerate operating throughout the world, alongside the recent MOU signed with Amec, further demonstrates the rapid transition of UPB’s vision from concept to delivery.”
UPB is an oil and gas development and production company which holds North Sea licences plus it has developed the buoy system.
For small, marginal oil fields, there is currently no stand-alone solution that allows economic production. Existing methods are too expensive and require large field sizes to recoup development costs.
The UPB System addresses this industry-wide, global problem where average field size is decreasing and production rates are declining. It is expected to unlock offshore oil fields containing 2-15million barrels of recoverable reserves.
COOEC’s role will be to begin deliveries of the UPB shells and components in about four years.
This fits into the Banchory firm’s customer delivery commitments beyond the first three UPB units.
UPB’s European development programme includes final engineering of the UPB system, construction of the first three units and development and subsequent production from a total of six oil fields across the UK (UPB-1), Ireland (UPB-2) and Denmark (UPB-3). As indicated above, the total cost of UPB’s European programme is estimated at more than $1.2billion.
China’s Offshore Oil Engineering Co is controlled by China National Offshore Oil Corporation (CNOOC).
Recommended for you
