In numbers: the PSVM offshore development
Much has changed since Angola's civil war ended a decade ago, and with new production coming onstream at the giant BP-operated PSVM development, there's no sign of the country's transformation slowing down any time soon.
With palm trees sprouting from the waterfront and skyscrapers popping up across the city’s skyline, everything in Angola’s capital city, Luanda, has a feeling of growth. Built originally for 500,000 residents – but now home to around 10 times that number – the city’s traffic-jammed streets and sprawl of housing show how much the country changes by the day. Even on the horizon, as you look out to the Atlantic Ocean, you can see growth. Dozens of tankers sit on the still, blue water, a glimpse of the country’s flourishing oil and gas industry. Angola is one of four key focus areas for BP, alongside the Gulf of Mexico, Azerbaijan and the North Sea, and the company is now benefitting from some of this growth, after years of heavy investment. BP has brought online its second operated development, PSVM, to join Greater Plutonio, which started up in 2007. There are also two non-operated producing developments, all of which means a daily output that now exceeds 200,000 barrels of oil equivalent net to BP and provides around one sixth of the company’s oil production. BP’s regional president for Angola, Martyn Morris, is the man tasked with overseeing this important part of the company. He says: “Oil has been a huge help to the country. If you look at Angola today, there are now 15 oil and gas operators here. They have brought in money, expertise, the need to rent houses, to buy cars; and it has all mushroomed. All the service industries have followed because of the business we do, then all the support industries that assist them, such as construction, have followed. “Angolans who had left are coming back because they can see that this country is beginning to flourish. The burgeoning middle class is happening.”
"Oil has been a huge help to the country. If you look at Angola today, there are now 15 oil and gas operators here. They have brought in money, expertise, the need to rent houses, to buy cars; and it has all mushroomed."- Martyn Morris
It is a far cry from 2002 and the end of a 27-year civil war in which more than 500,000 Angolans lost their lives. In the intervening years, society has been doing its best to catch up with other fast-growing African economies, such as Ghana and Nigeria. The streets are dominated by the ‘informal goods’ market – all sorts of people, selling all sorts of things – from cold water to sunglasses. Even the most common signs of capitalism, ranging from famous soccer team shirts and Coca-Cola stalls, have become familiar sights. As Angola gets bigger, the world around it becomes smaller, as well. It would have been unthinkable 10 years ago to fly far afield from Luanda, yet nowadays you can jump on a plane direct to Houston or London. The country has also seen an influx of foreign nationals, most notably a large Chinese community, which has invested heavily in the country’s infrastructure – helping to rebuild and maintain roads following the destruction caused by the war. This diversity is also boosted by a stable expatriate population, primarily in the capital, where hotels are routinely filled with a mix of nationalities. With a changing population and strong foreign investment, Luanda has inevitably become one of the most expensive cities in the world. A casual lunch can cost you more than $100, and because a lot of the food in supermarkets is imported, the price is hiked. Even a coffee can set you back $9 – a hefty price for a morning kick.
Beyond city limits
For all of this development in the city, outside Luanda, it feels like an entirely different country. Angola remains largely rural, dominated by rainforests to the east and desert land to the south, which stretch for hundreds of kilometres. Angola’s estimated 18 million inhabitants live in a country that is around five times the size of the UK. This is why communities are increasingly popping up close to the main roads – so that they are connected to the veins of the capital. Practically, all roads lead to Luanda. If you take all of this as context, it is easy to see that Angola has undergone a metamorphosis in the past decade. For BP, and its heritage company, Amoco, the challenge has been to play a role at the forefront of this transformation by helping to evolve an already fast-growing energy industry. The latest step is the $14 billion Plutão, Saturno, Vénus and Marte (PSVM) development, which began producing oil in December 2012 from Block 31. Named after planets, it is a project so complex that it could well be found on another world. The four fields sit 180 kilometres (110 miles) from the Angolan coastline and are marked in the ocean by a hulking mass of steel – the PSVM floating, production, storage and offloading (FPSO) vessel. This asset acts as the hub of activity – a central point for collecting and offloading the oil onto tankers, as well as re-injecting gas and water into reservoirs to help stabilise them. But it’s beneath the waves where the project’s true scale comes to life.
BP has built an underwater city on the seabed to extract the oil – the largest subsea development in the world to be exact, two kilometres (one mile) below the surface – the equivalent of stacking six Eiffel Towers on top of each other. Sitting down there is 77,000 tonnes of equipment, linking up the four fields, whose extremities lie 34 kilometres (21 miles) apart. The net result of all of this is expected production of 157,000 barrels of oil equivalent per day at its peak, and BP’s stake is 26.67%. The man who managed the PSVM project, Gerry McGurk, says: “The significance of Block 31 is that it is the first ultra-deepwater block to be developed in Angola. For the past 10 years, there has been a lot of production coming from the deepwater Blocks 15, 17 and 18. They are technically defined as deep water, being around 1,600 metres [5,250 feet]. Not that long ago, that would have been remarkable in itself, but the industry has moved on. “The big feature with these developments is that they all had a large oilfield effectively sitting under their floating, production system, which means less infrastructure per barrel and good projects. When we get to 31, the nature of the challenge is quite different, because we are going down to 2,000 metres [6,560 feet] for PSVM. It does not sound much, those extra 400 metres [1,310 feet], but that is really quite a significant change in pressures and water depth and industry capability. In addition, the Block 31 fields are geographically dispersed and similar size, without a big ‘anchor’ field. This means we have to have extensive subsea facilities – pipeline and control systems – to string together these fields.” In addition to the production of oil from this development, BP will soon be able to market the gas from these reservoirs, too. The new liquefied natural gas plant in Soyo in the far north of the country came online in June 2013, with BP holding a 13.6% shareholding. Pipelines carry back gas from BP’s producing fields to the facility, which will reduce and then cut the need to flare (burn off) the gas as it is removed from the reservoir. With global gas demand expected to grow by 2% per annum, it adds another string to the bow of a business that is firmly ramping up.
"We have created a real culture here where excellence in safety – both process and personal - is second nature."
- Martyn Morris
With such complex operations ongoing, BP has invested heavily to prepare for every eventuality in a country where logistics and infrastructure are inevitably some way behind the UK and US. For instance, the company has a deepwater capping stack on hand in Luanda and stocks of dispersant are stored locally in case of oil spill. BP is also part of a global mutual aid agreement with fellow oil and gas companies. Onboard the vessels, the need for systematic operating and rigorous safety standards is paramount. Morris says: “The great thing about Angola is that the industry is relatively new. There is no baggage here. We don’t need to worry about changing people’s perceptions because they aren’t ingrained. “We have created a real culture here where excellence in safety – both process and personal – is second nature. I truly believe we are as good as anybody in the company here, without any doubt, and I expect every one of the leaders here to take it as seriously as I do.” BP’s vice president of operations, Fernando Guitart, who looks after both FPSOs, is one of those leaders. “To get safety right, you need strong leadership, a capable workforce, control of your hazards and flawless execution. If you do all of this safely, production naturally comes with it.”
BP’s other operated FPSO in the country, Greater Plutonio, is a good example of this combination. It is now delivering 200,000 barrels of oil per day (of which BP has a 50% stake) and is maturing into a high-class, high-margin asset. The team onboard is a mixture of different nationalities and BP staff and contractors, but Guitart feels it is the single-community attitude that pervades that has helped them to be successful. “People see it as one team and don’t differentiate, which is great to see. It doesn’t matter if you’re Angolan, Portuguese, Scottish, English or whatever – you all contribute to the success of the operation. And success breeds success, being on a winning team energises everyone. When we get good feedback and results on the vessel, we share it with the team and it acts as a positive reinforcement that drives even better results.” So what of the future? Ironically, a BP discovery on the other side of the Atlantic Ocean could hold a clue. The successful flow test of the Itaipu-1A well in the Brazilian Campos basin was the latest in a string of discoveries for energy companies off the Atlantic coast of the South American country. Although the Atlantic Ocean separates them by thousands of kilometres now, Brazil and Angola were once joined in the prehistoric supercontinent, Pangea (see BP Magazine Issue 1 2013: Rock solid science for more on tectonic plates), and the theory is that the offshore basins of Angola mirror the offshore basins of Brasil. New concession blocks for exploration access in the ‘pre-salt’ Kwanza and Benguela basins were signed by BP in 2011, where the hydrocarbons are thought to lie beneath a thick layer of salt under the seabed. Morris says: “We hope to start exploration drilling there in 2014. People are watching very carefully, because if these basins are anything like as good as the Brazilian ones, the oil industry in Angola is in for a superb future. “We’ve already invested $20 billion in Angola, and if the Kwanza-Benguela basins work out, we could be talking about $10-15 billion in the next decade. This country is a huge part of BP’s future growth.”
In capable hands: Education support
In a country where youth is in abundance, it seems obvious that education will play a defining role in determining Angola’s long-term future. Yet, according to Unicef, around 1 million children are not in primary education, while just 20% of 12-17-year-olds are in school. But, as Angola grows, so, too, does its demand for talent – which is why it’s vital that companies such as BP are supporting education needs at all levels. BP’s communications and external affairs vice president for Angola, Paulo Pizarro, sees a country that is trying to catch up with demand: “In a little more than 10 years, we have come from being in a civil war, where the need for capability was low, to the country you see today, where the energy industry is beginning to thrive. There is a huge demand that accompanies that.” BP spends around $9 million every year on social investment in the country, including new schools, childcare centres, and vocational and university programmes. One such project, a new school that opened in April in the rural town of Camabatela, is a prime example of the benefits of such investment. The town is a 400-kilometre (250-mile) drive northeast of Luanda, surrounded by grassy plains and lush rainforest. As pleasant as the scenery sounds, the isolated location has meant that investment in infrastructure has been limited.
First of its kind
The new facility is the first school in the town, and was designed by a 22-year-old architect from the local area. Twelve classrooms with 48 desks each host almost 2,000 children per day in shifts, while accelerated learning programmes for adults are also on offer. The demand for education in the town is so high from the students, that a new teachers’ course is being run to train local people so that they can tutor the children. BP’s regional president for Angola, Martyn Morris, is well aware that enthusiasm is not in short supply. “The kids are so keen to learn. There is an inherent intelligence in the people here. Capability exists – it just needs nurturing, because it is not rooted, yet.” Farther up the educational ladder, Morris is keen to further ‘Angolanise’ the teams responsible for BP’s major operated assets in the region – the Great Plutonio and PSVM floating, production, storage and offloading (FPSO) vessels. BP runs technician training programmes and scholarships to encourage the next generation of energy workers, believing it is in both the company’s, and the country’s, interests. Morris says: “We know that the easiest way in the long term is to have Angolans doing these jobs, rather than recycling expatriates through on rotations, which is not sustainable. The first couple of years of these programmes, we had some good kids coming through, but the past few years we have had some fabulous kids coming through. “There is a young man called Wilson who is out on the asset course that we run; he was the supervisor offshore on Greater Plutonio. He came out of school and went through the technician training. He has now worked for BP for 10 years. He is a star of the future, so we sent him on an asset course. Just watching him, a young man full of confidence, dealing with people who are a lot more experienced and older than him, it is truly gratifying.” The Greater Plutonio FPSO is now seen as a capability model for the oil industry in Angola. Nine of the 14 supervisorys, half of the team leaders, and more than 70% of the technicians onboard are Angolans. This also serves as an important example for BP’s latest FPSO in the country – PSVM. Having only come online in December 2012, PSVM is staffed by a majority of expatriates at this stage, but has a core of Angolan staff on the management team. The man in charge of the vessel, offshore installation manager Graeme Pirie, who has previously worked in the North Sea, says: “We are coaching Angolans to work ourselves out of a job. There are now technician and graduate programmes and the ability to fast track people, which helps.”
"My career with BP has been quite exciting. I have worked in the UK, US and Angola to get to where I am. I felt very proud of myself when I was asked to join the team on PSVM, I knew that all of my hard work had paid off. I look forward to a long career in BP."- Dina Mendes
Dina Mendes is a great example of this. She began at BP in 2006 and is part of the company’s Challenge programme, designed to develop graduate hires. She has gone from technician trainee, learning her craft in BP’s Dimlington Terminal in the UK, to becoming a member of the management team onboard PSVM, all by the age of 28. She says: “My career with BP has been quite exciting. I have worked in the UK, US and Angola to get to where I am. I felt very proud of myself when I was asked to join the team on PSVM, I knew that all of my hard work had paid off. I look forward to a long career in BP.” Martyn Morris is encouraged for the future: “This country has 18 million people in it and 60% of them are under 30. The resource is at hand. Therefore, to recruit the right people, we need to start at ground-level. You have to invest time and money, but if you are going to do it, you need to do it properly, in a really rigorous manner. That is what we are putting in place.” With decades of production life left in PSVM, and future concession blocks agreed, the need for more rising stars is apparent.