Monday, August 7, 2000

Vibration problems for Millennium

Royal Caribbean's Celebrity Cruises says it has been working in cooperation with Chantiers de l'Atlantique, the builder of its newest ship, Millennium, to evaluate the ship's performance. The ship is equipped with the cruise industry's first gas turbine engines, and testing has demonstrated that Millennium has unusually low levels of noise and vibration. However, testing also has shown that under certain unusual sea conditions a vibration could be felt within certain areas of the ship.

While this has not been, and is not expected to be, a problem on the ship's current European sailings, it is possible that the sea conditions in question could be more prevalent in the Caribbean. Because of the high standards to which Celebrity Cruises holds its ships, the company is working with the ship's builder to resolve the matter prior to its sailing in the Caribbean this winter.

The joint effort could lead to a decision to put the ship in dry dock for a period of time following its arrival in New York on November 15. That decision, however, has not yet been made.

Conoco and Maritrans cooperate on shuttle tanker development
Conoco Inc.and Maritrans Inc.last week announced that they are jointly developing advanced shuttle tanker technologies to transport deepwater Gulf of Mexico crude to U.S. refineries.

"The industry is actively exploring for the 10 billion barrels of crude oil reserves that are estimated to be contained in the deepwater Gulf of Mexico," said Rob McKee, Conoco executive VP for exploration production. "Operations in deepwater are expensive, and we are continuously seeking ways to improve the economics of our deepwater program. Reducing the time between investment and the return on that investment makes deepwater exploration even more attractive than it is today."

The companies have decided to proceed with development plans as the Minerals Management Service (MMS) continues to evaluate the use of shuttle tankers to transport crude oil production in the Gulf of Mexico. The MMS is expected to make a final decision next year.

"We are hopeful the safety and performance records of shuttle tankers used in other parts of the world will help convince the MMS the concept is suitable for use in the Gulf of Mexico," said Eric L. (Rick) Oshlo, Conoco VPand general manager of supply and trading. "If the MMS does approve the concept for use in the Gulf, Conoco and Maritrans will have state-of-the-art technologies ready for deployment. If they don't, we will have some very innovative ideas that would be applicable to help other nations develop their deepwater reserves, quickly, safely and economically."

Oshlo said the companies were evaluating variations of shuttle tankers and deepwater loading systems successfully used elsewhere in the world to transport remote crude oil reserves to determine their applicability in the Gulf of Mexico.

Conoco's fleet of double-hulled ships includes the "Rangrid," a specially designed, state-of-technology shuttle tanker used to transport crude oil from the Heidrun field in the Norwegian Sea to European markets. The Heidrun field, located north of the Arctic Circle and in some of the world's stormiest seas, could not have been economically developed without the use of shuttle tankers and proprietary loading systems. Direct shuttle loading from Heidrun to the "Rangrid" and other shuttle tankers boasts an unprecedented 100 percent uptime since first oil was produced in 1995.

Over 25 years ago, Maritrans pioneered the lightering system that supplies almost 100 million barrels of crude oil each year to eight refineries in the Northeast United States. Maritrans' vessel allocation process is designed to reduce on shore crude storage and keep deliveries on a consistent, reliable schedule. Maritrans' multi-vessel system for unloading cargo directly from large oil tankers situated offshore and in the Delaware Bay remains the most cost-effective alternative for delivering foreign crudes.

"Conoco and Maritrans are working as quickly as possible to finalize our approach for Gulf of Mexico shuttling before we begin talking with prospective third-party customers for the system," said Stephen A. Van Dyck, chairman and chief executive officer of Maritrans. "Our first concern will be to ensure an environmentally sound operation," he emphasized.

Frontline nearer to Golden Ocean acquisition
The bankruptcy court in Wilmington, Delaware has approved Frontline's disclosure statement setting out its proposal for restructuring of Golden Ocean Group Ltd.

Frontline's restructuring plan was backed by Golden Ocean Group and the official creditors' committee. The proposal will now be distributed to bondholders for voting. Frontline says it has, through its own bond position and through a lock-up agreement, secured support from two-thirds of the unsecured claimants

A final confirmation hearing for the plan is set for September 15. Prior to that, on August 14, the court will also arrange a hearing on a proposal to appoint Frontline as manager for the Golden Ocean operation with immediate effect .

Frontline chairman John Fredriksen commented "The new schedule set by the Court should make it possible for us to have Golden Ocean's operation fully consolidated in Frontline before the end of September. The fact that Frontline is likely to get management control already next week gives us the opportunity immediately to reduce the cost structure of Golden Ocean. "

Diamond Offshore to upgrade semi to "fifth generation"
Diamond Offshore Drilling Inc. has reached an agreement with Singapore's Keppel FELS Limited that provides for the significant upgrade of the semisubmersible Ocean Baroness to fifth-generation capabilities. The planned deepwater upgrade is described as "a greatly enhanced version" of the company's successful Victory-class upgrades. Initial outfitting will be designed to include stability enhancements and self-contained chain/wire mooring for operation in water depths to 6,000 ft with approximately 6,200 tons operating variable deck load, 15,000 psi blowout preventers and riser with a multiplex control system. Additional features including a high capacity deck crane, significantly enlarged cellar deck area and a 25 ft by 90 ft moon pool will provide enhanced subsea completion and development capabilities. Water depths in excess of 6,000 ft are readily achievable utilizing preset taut-leg mooring systems.

The rig will commence mobilization from the Gulf of Mexico within 30 days to a Keppel FELS facility in Singapore. The cost of the "Ocean Baroness" deepwater upgrade is estimated to cost approximately $180 million and is anticipated to take approximately 18 months, including mobilization to the shipyard.



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