Hopes for progress on Tyra redevelopment

Maersk Oil optimistic Danish government will grant tax assistance for sector’s key hub

Maersk Oil chief executive Gretchen Watkins has expressed confidence that a redevelopment of the Tyra field will go ahead, avoiding a need to decommission the key hub for the Danish oil and gas sector.

Watkins told Upstream she is optimistic an “ongoing and continuously constructive dialogue” between industry and government will result in tax assistance that Maersk said is required for the redevelopment to be economically viable.

“I believe we have identified a win-win space that we are working towards and I anticipate we will be at conclusion in the near future,” Watkins said.

“I certainly hope that it is as soon as possible and I am absolutely convinced that our colleagues in the industry are certainly aligned with us and our colleagues in the government are aligned too.”

The positive signals are likely to provide reassurance for work-hungry contractors still waiting to be invited to tender for the seven-platform bonanza likely that is to be offered if the redevelopment gets the green light.

Maersk is under pressure to come up with a long-term solution for the Tyra facilities, which are slowly sinking due to seabed subsidence.

The company’s request for fiscal help has become intertwined with a wider government review of the Danish oil and gas sector that had been set for completion by the end of 2016 but has been delayed.

With no conclusion to the talks in sight, Maersk notified the Danish gas market in January that it had been compelled to start the engineering work required to cease output by a 1 October 2018 deadline.

However, work on the redevelopment is continuing concurrently while it still remains a possibility.

Watkins said: “While I wish I had a crystal ball and could give you a date I can’t, but what I can say is that I think it will be quite soon and it really does need to be quite soon.

“The rebuild is following our project maturation process and we are quite close to being able to move into the tender process and I anticipate that will happen when we are certain that we have got a project here.”

Sources told Upstream that fabricators are beginning to show signs impatience at the lack of progress, with some saying Maersk has “gone quiet”.

Sources said Maersk is still evaluating pre-qualifications but has remained silent on when it expects to issue invitations to tender, which were initially expected last year before being pushed back to earlier this year, but still with no firm news.

South Korea’s Hyundai Heavy Industries, US giant McDermott, Sembcorp Marine Offshore Platforms of Singapore, Heerema Fabrication Group (HFG) of the Netherlands, Spain’s Dragados Offshore and Kvaerner of Norway are understood to be circling for work.

One source said: “It has gone very quiet now. We’re waiting for the ITT to hit the market. It was due to be the first quarter of this year but looks like it will be in the second... if things go ahead, of course, which is not certain. We don’t have that much information. We hope things will go ahead but we have no real detail.”

Earlier, market sources suggested that Singapore-based Sembcorp Marine and HFG will be well-positioned because Maersk is said to be happy with progress they are making on EPC contracts for its Culzean high-pressure, high-temperature project in the UK.

Tyra is Denmark’s largest gas field and the facilities are the processing and export centre for all gas produced by the Danish Underground Consortium, a partnership between Maersk on 31.2%, Shell on 36.8%, Nordsofonden on 20% and Chevron on 12%.

More than 90% of Denmark’s gas production is processed through the facilities.