Sunday, December 30, 2012

What is a fiscal cliff ?


“Fiscal cliff” is the popular shorthand term used to describe the conundrum that the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect.
Among the laws set to change at midnight on December 31, 2012, are the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, a rollback of the "Bush tax cuts" from 2001-2003, and the beginning of taxes related to President Obama’s health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect. According to Barron's, over 1,000 government programs - including the defense budget and Medicare are in line for "deep, automatic cuts."
In dealing with the fiscal cliff, lawmakers have a choice among three options, none of which are particularly attractive:
  • They can let the current policy scheduled for the beginning of 2013 – which features a number of tax increases and spending cuts that are expected to weigh heavily on growth and possibly drive the economy back into a recession – go into effect. The plus side: the deficit would fall significantly.
  • They can cancel some or all of the scheduled tax increases and spending cuts, which would add to the deficit and increase the odds that the United States could face a crisis similar to that which is occurring in Europe. The flip side of this, of course, is that the United States' debt will continue to grow.
  • They could take a middle course, opting for an approach that would address the budget issues to a limited extent, but that would have a more modest impact on growth.
Can a Compromise be Reached?
The oncoming fiscal cliff is a concern for investors since the highly partisan nature of the current political environment could make a compromise difficult to reach. This problem isn’t new, after all: lawmakers have had over a year to address this issue, but Congress – mired in political gridlock – has largely put off the search for a solution rather than seeking to solve the problem directly. In general, Republicans want to cut spending and avoid raising taxes, while Democrats are looking for a combination of spending cuts and tax increases. Although both parties want to avoid the fiscal cliff, compromise is seen as being difficult to achieve – particularly in an election year. Currently, it appears that a meaningful deal won't be reached until after the December 31 deadline.
The most likely outcome is another set of stop-gap measures that would delay a more permanent policy change. Still, the non-partisan Congressional Budget Office (CBO) estimates that if Congress takes the middle ground – extending the Bush-era tax cuts but cancelling the automatic spending cuts – the result, in the short term, would be modest growth but no major economic hit.


Fiscal Cliff


Possible Effects of the Fiscal Cliff
If the current laws slated for 2013 went into effect permanently, the impact on the economy would be dramatic. While the combination of higher taxes and spending cuts would reduce the deficit by an estimated $560 billion, the CBO also estimates that the policy would reduce gross domestic product (GDP) by four percentage points in 2013, sending the economy into a recession (i.e., negative growth). At the same time, it predicts unemployment would rise by almost a full percentage point, with a loss of about two million jobs.
A Wall St. Journal article from May 16, 2012 estimates the following impact in dollar terms: “In all, according to an analysis by J.P. Morgan economist Michael Feroli, $280 billion would be pulled out of the economy by the sunsetting of the Bush tax cuts; $125 billion from the expiration of the Obama payroll-tax holiday; $40 billion from the expiration of emergency unemployment benefits; and $98 billion from Budget Control Act spending cuts. In all, the tax increases and spending cuts make up about 3.5% of GDP, with the Bush tax cuts making up about half of that, according to the J.P. Morgan report.” Amid an already-fragile recovery and elevated unemployment, the economy is not in a position to avoid this type of shock.
The Term "Cliff" maybe misleading
It's important to keep in mind that while the term “cliff” indicates an immediate disaster at the beginning of 2013, this isn't a binary (two-outcome) event that will end in either a full solution or a total failure on December 31. There are two important reasons why this is the case:
1) If all of the laws went into effect as scheduled and stayed in effect, the result would undoubtedly be a return to recession. However, Congress continues to work toward a deal that will alleviate the effects in some form. The chances that such a deal won't be reached at some point are slim.
2) Even if the deal does not occur before December 31, as appears likely, Congress can - and almost certainly will - act to change the scheduled laws retroactively to January 1 after the deadline.
At the same time, even a "solution" isn't necessarily positive, since a compromise will likely involve higher taxes or reduced spending in some form - both of which would help reduce the debt, but would be negative for economic growth.
With this as background, it's important to keep in mind that the concept of "going over the cliff" is largely a media creation, since even a failure to reach a deal by December 31 doesn't mean that a recession and financial market crash will occur.

Fiscal Cliff2

Unfortunately, the fiscal cliff isn't the only problem facing the United States right now. At some point in the first quarter, the country will again hit the "debt ceiling" - the same issue that roiled the markets in the summer of 2011 and prompted the automatic spending cuts that make up a portion of the fiscal cliff.

Finally, 3rd January 2013, President Barack Obama has signed with an autopen a bill that boosts taxes on the wealthiest Americans, while preserving tax cuts for most American households. The bill, which averts a looming fiscal cliff that had threatened to plunge the nation back into recession, also extends expiring jobless benefits, prevents cuts in Medicare reimbursements to doctors and delays for two months billions of dollars in across-the-board spending cuts in defence and domestic programmes.

The Republican-run House approved the measure by a 257-167 vote late on Tuesday, nearly 24 hours after the Democratic-led Senate passed it 89-8.  Mr Obama, who is vacationing in Hawaii, signed the bill using an autopen, a mechanical device that copies his signature. The US leader also signed a US$633 billion (S$772.5 billion) defence bill for next year that tightens penalties on Iran and bolsters security at diplomatic missions worldwide after the deadly attack in Benghazi, Libya.

Mr Obama had threatened to veto the measure because of a number of concerns, including limits on his authority to transfer terrorist suspects from the US military prison at Guantanamo Bay, Cuba, for one year.  US actions to avoid the fiscal cliff did not go far enough to address the country's long-term fiscal deficit and debt problems, the International Monetary Fund (IMF) said in a reaction to the the political deal.  "In the absence of congressional action the economic recovery would have been derailed," IMF spokesman Gerry Rice said.

China has a strong interest in a healthy US economy. It sits on the world's biggest pile of foreign exchange reserves, worth US$3.3 trillion (S$4 trillion), and as much as 70 per cent of the holdings are invested in US dollar assets, including US Treasuries, according to analysts.

Noting that the US will grapple with the debt ceiling next month, after which the "austerity time-bomb" will begin ticking again, Germany's Der Spiegel said: "We are... witnessing a superpower losing its way in a maze of details, propelled forward by grandstanding politicians".

After the fiscal deal signed by President Barack Obama, there is a "feel good" effect - most Americans can breathe easier now that they will not have to pay higher income tax and that a recession seen as inevitable has been avoided. But economists were less reassured, warning that it was still going to hurt, with slower growth and fewer jobs.
Most Americans will see no change in their income tax rates after the deal which included tax increases on the country's wealthiest 2 per cent and higher pay cheque deductions for all workers.

The biggest impact, say economists, will be from an increase in how much employees see deducted from their pay cheques for social security: After having been cut to stimulate growth in recent years, the rate goes back to 6.2 per cent from 4.2 per cent.

Mr Gregory Daco of IHS Global Insight estimated that will pull US$113 billion (S$138 billion) out of the economy - money that mostly would have otherwise been spent on goods and services.

"That is the measure that is going to hit the most people," he said - by itself cutting 0.4 per cent from potential growth.

An increase in tax rates for Americans earning more than US$400,000, to 39.6 per cent from 35 per cent, will not have as large an impact, he said: "A dollar for them is not the same as a dollar for someone earning US$50,000."

Moreover, politicians still face a battle over cutting federal spending - put off for two months in the wrangling over the cliff deal finally passed on Tuesday - that could further crunch the economy this year. That means more tepid expansion of gross domestic product (GDP) this year, with equally slow job creation as in 2012, by most estimates.

Economist Mark Zandi of Moody's Analytics said the tax increases and spending cuts still to be agreed will take about one percentage point from what growth could have been, had the 2012 tax rates and spending plans stayed in place.

"The result is that the US economy will grow just over 2 per cent in 2013, about the same as in 2012," Mr Zandi said.

In addition, he added, it will hold back job creation, "with 700,000 fewer net new jobs created and an unemployment rate about half a percentage point higher than it would have been if last year's policy had simply been extended".

Though the deal significantly raises taxes on the rich, with no expiration date. It extends tax credits for the poor and middle class. It provides more jobless benefits. Largely overlooked, it extends an alternative-energy tax credit that has helped create a clean-energy boom. And it includes almost no spending cuts.

For President Barack Obama and his Democratic allies in Congress, the fiscal deal reached this week is full of small victories that further their largest policy aims.

Above all, it takes another step towards Mr Obama's goal of orienting federal policy more towards the middle class and poor, at the expense of the rich. Yet the deal also represents a substantial risk for the president.Throughout the negotiations of the past two months, Mr Obama pushed for a larger agreement, one that would have cancelled other looming budget deadlines, starting with one on the debt ceiling.

He and his aides saw the so-called fiscal cliff, with its trillions of dollars in scheduled tax increases that Republicans abhorred, as leverage to start fresh in a second term and avoid more deadline-driven partisan fights.

When House Republicans made it clear that they opposed a big deal, however, Mr Obama decided to take the smaller deal, bank a series of victories and wait to fight another day. The alternative - debated inside the White House, but not ultimately a close call - would have been to go over the cliff in the hope of forcing Republicans into a larger deal.

Without that larger agreement, Mr Obama will be left to find solutions to future budget deadlines without the leverage that came with the prospect of automatic tax increases.

"The best world would have been a bigger agreement," an administration official acknowledged. "This is a big win in a second-best world."

As part of this week's deal, Mr Obama did make several major compromises. He accepted much less in overall tax revenue than the government would have received without any deal. He allowed a payroll tax cut, which applied to most households, to expire.

And he yielded both on aspects of the estate tax and on the level at which the top marginal income-tax rate would start, moving it to US$450,000 (S$550,000) for couples, from US$250,000.

Still, using inequality as a yardstick, he won much of what he had wanted. By holding firm to a top rate of 39.6 per cent - up from 35 per cent - he locked in a substantial tax increase for the very richest, who have received the biggest pre-tax raises in recent years.

The question that hangs over the deal for Democrats is whether they will have to play defence on the budget for the rest of Mr Obama's presidency.

But some of Mr Obama's allies wonder if he should have taken the risk of a confrontation now. A stalemate next time will bring no threat of higher taxes, and Republicans may stand firmer, demanding cuts that undo Mr Obama's recent gains.


Saturday, December 29, 2012

To invest in foreign currencies or not ??

Do not be surprised if you are already exposed to foreign currencies, even though you haven't made a conscious decision to dabble in it! 
Even if you buy a stock that is listed in Singapore, all of the company's revenue could come from other countries. Take, for instance, Global Logistics Properties, the company which was listed on the Singapore Exchange owns, manages and leases 296 properties within 122 integrated parks. Its network is spread across 25 major cities in China and Japan. Most of (the company's) income comes from Japan and China . . . (and it) doesn't have any property in Singapore, despite being priced in Singapore dollars. As such, the company's bottom line is affected by market sentiment, economic performance and natural disasters affecting those two countries.

But what about investors who wish to be directly exposed to FX? There are a couple of options available:

Dual currency deposit

A dual currency deposit (DCD) is a derivative instrument which combines a money market deposit with a currency option to provide a (potentially) higher yield than what is available for a standard deposit.

How does it work?

1. The base currency is deposited for a pre-determined term, from a week to a few months.
2. A specific exchange rate between the two currencies (the strike price) is agreed upon. These two currencies are known as the base currency and the alternative currency.
3. The return you get on your deposit depends on the market movement of the exchange rates between the two currencies, i.e. the investor is obligated to exchange an agreed amount of the base currency for the alternative currency at the strike price when the alternative currency weakens beyond the pre-agreed price.

Factors affecting return:
Investment tenor: A longer investment period translates into higher returns.
Strike price: The further away the strike price is from the current price, the lower the return. In other words, the higher the chance of the investor getting the alternate currency, the higher the investor's returns.
Volatility of currency pair: Currency pairs with higher volatility will reap higher returns.

What are the risks?
Foreign exchange risk: Apart from the inherent risks involved when dealing with FX, investors should be aware of potential losses when converting currencies. When the maturity proceeds are returned in the alternative currency and subsequently converted back to the base currency, a loss may be experienced due to movements in currency exchange rates. These losses may offset any interest earned on the deposit.

Liquidity risk: Investors are essentially locking in their money for the tenure of the deposit as penalties are enforced if withdrawal is made prior to maturity.

No guarantees: This is a non-principal guaranteed product, which means investors may lose part of their principal sum. This may happen especially when the investor ends up holding the alternative currency.

Credit risk: As this is an investment product, it is not protected by the Monetary Authority of Singapore's guarantee on saving deposits.
Foreign currency fixed deposits The foreign currency fixed deposit (FCFD) is similar to the Singapore dollar fixed deposit in that a sum of money is deposited with the bank for a fixed tenure and at a fixed interest rate. The main difference is that this deposit is denominated in a foreign currency.

Factors affecting returns:

Investment tenor: A longer investment period translates into higher returns.

The interest rate is calculated based on prevailing foreign currency market interest rates, and is adjusted to accommodate the bank's costs, risks associated with the product, and the bank's profit margin. The interest rate quoted at the start of the term is fixed for the entire tenure.

Volatility of currency pair: Generally, an investor has to be confident that the target currency will appreciate in order to ensure positive returns. Alternatively, ensure that you have a sufficiently long investment horizon to ride out exchange rate fluctuations.

Bonds
Bonds are issued by corporations or governments from around the world. Some banks here offer foreign bonds in an international currency.

Such investments can be attractive, especially compared to local bonds. However, as this requires conversion to a foreign currency, it is a good proposition only as long as the Singapore dollar does not appreciate substantially against that currency.

Who should enter the tiger's den? 
Broadly speaking, these investment alternatives are suitable for investors who:
Have sufficient funds to withstand the loss of capital in the event that the currency option is exercised;



Understand forex risks;

Don't mind holding an alternative currency.

Finally, an investor should be aware that currency exchange rates can be influenced not only by the monetary policies of his own country's central bank but also the monetary policies of trading partners. Market sentiment, economic performance and even natural disasters can play a role in shifting currencies up or down relative to the currencies of other countries.
The Asian proverb, 'You cannot catch a tiger cub unless you enter the tiger's den', holds true. If you decide to dabble in FX, however, make sure you have a firm grasp of the market and its accompanying risks. If otherwise, do not go into this "money making" option while your knowledge of the risk is low and you do not wish to get your pocket burnt.

Be positive and lead a happy life

 
RULE NO. 1
Be a positive, optimistic and kind person. Whether you are a happy or unhappy person depends largely on yourself. Negative and pessimistic people are generally unhappy people. Be kind to others. Kindness begets kindness. Try to do a good deed every day. You will find that by brightening the lives of others, you will brighten your own life.





RULE NO. 2
Maintain a healthy and happy family. If your parents are elderly and living by themselves, try to visit them at least once a week and share a weekly meal with them. One of the problems encountered by our older folks is loneliness.
Be on excellent terms with your spouse. Be faithful to your wife, treat her as if they were still courting and give her all your money.... however, if in case where your wife is a spender and not a saver, then you decide or not to give all.
As for how to behave towards one's children, the advice given by Kahlil Gibran: "And though they are with you yet they belong not to you. You may give them your love but not your thoughts. For they have their own thoughts."


RULE NO. 3
Find a job you enjoy doing. One of the reasons so many Singaporeans are unhappy is probably that they do not like their jobs or complained about their salary and expenses. Since we spend so much of our lives and time at work, maybe it is better to have a worklife balance to find a job which is not a chore to endure but a pleasure to do. In recent years, it has been noticed a trend of many locals and Singaporeans leaving their jobs for other jobs which pay them less and lesser bonuses but give them greater satisfaction. This could be a good thing and demand lesser stress on individual who value their personal life more.

RULE NO. 4
Treasure your true friends. In your life journey, you will make many friends - at school, at university, in sports or other activities and at work. Try to develop a small circle of very good friends, friends who will stand by you in good times and bad times. In work place, do not involve in office politics. You will not gain any better if you are poor in handling office politics.





RULE NO. 5
Exercise regularly. Exercise not only makes you healthier, it also makes you feel better. Therefore, make regular exercise a part of your lifestyle. You can't be a happy person if you are not in good health. Work stress may hit you with extra sickness if you are weak and it may be too late if you are not able to cope with stress.  So get out the stress by some workout.  Any form of workout with colleagues may also help, eg. bowling, jogging, etc.


RULE NO. 6
Enjoy eating but eat healthily and avoid the sin of gluttony. Singapore is a culinary paradise. Food is abundant, diverse and affordable. If you reach your 50s' like me, eat moderate and watch your diet.
You can eat well on any budget. Let us enjoy our food but let us also exercise some discipline when choosing what to eat. I have always tried to follow the ancient Asian wisdom of stopping when I feel 80 per cent full and not over indulged.


RULE NO. 7
Be a volunteer and support philanthropy. Mrs Barbara Bush, the wife of the 41st President of the United States said there was a period in her life when she suffered from depression. Instead of seeing a psychiatrist or taking medication to overcome her depression, she decided to be a volunteer. She found that by helping others less fortunate than herself, her depression gradually disappeared.
Whether we are rich or poor, we should contribute to a cause or causes close to our hearts. In spite of our favourable tax regime and the presence of many wealthy people in our society, it was very disappointed to see how lowly Singapore ranked in the table of countries for philanthropy. A saying  that no man could be truly happy if he lives only for himself.

RULE NO. 8
Read books and listen to music. Reading is an excellent habit. Books keep youcompany when you are alone.  Reading is an endless source of happiness. So is music. With the web around these days, you may also start to do your own blog. Some of the personal blogs which you could see nowadays are very well done and you do not need to pay a single cent but the practicing of blogging improves your knowledge and networking with the outside world.  



RULE NO. 9
Take pleasure in the little things in life. Try regular walks in the Botanic Gardens. Try to find joy in meeting old friends, attending a concert at the Esplanade and visiting a wonderful exhibition at one of our museums.  Outing on weekends with your family members is definitely one of the good workout.


RULE NO. 10
Don't envy others. Dr Wee Kim Wee, our sixth President once said that one of the reasons which caused people to be unhappy was that they were envious of others. Dr Wee said he never envied his friends who had a better education or earned more money or lived in bigger houses or owned more expensive cars. His rule was to be contented with what he had. This is a good rule. Philosophically, it would be even better if you could feel vicariously happy when you see your friends and former students doing well in life.  Contentment is natural wealth, luxury is artificial poverty.
 
“Be thankful for what you have; you'll end up having more. If you concentrate on what you don't have, you will never, ever have enough”
Oprah Winfrey
 
“Be content with what you have;  rejoice in the way things are. When you realize there is nothing lacking,  the whole world belongs to you.”
Lao Tzu
 
“A quiet secluded life in the country, with the possibility of being useful to people to whom it is easy to do good, and who are not accustomed to have it done to them; then work which one hopes may be of some use; then rest, nature, books, music, love for one's neighbor — such is my idea of happiness.”
Leo Tolstoy
 
“Do not spoil what you have by desiring what you have not.”
Ann Brashares
 
“You say, 'If I had a little more, I should be very satisfied.' You make a mistake. If you are not content with what you have, you would not be satisfied if it were doubled.”
Charles H. Spurgeon

Sunday, December 9, 2012

Newbuild offshore drilling rig tilts at Singapore Shipyard


Extracts from Straits Times 4th Dec2012

About 90 workers were injured when a jackup rig at Singapore Shipyard tilted to one side on Monday.
Among them, 22 were quite seriously injured and one was in a critical condition. The rest suffered minor injuries.

The accident happened at one of Singapore shipyard worksite at Tanjong Kling Road.
Preliminary findings showed that the three-legged jackup rig tilted to one side after the jack-up mechanism of one of the legs failed to work.

Officers from MOM's Occupational Safety and Health Inspectorate responded immediately and were investigating the accident on-site .

Thousands of workers were said to be working on the rig at the time of the accident, according to Chinese Shin Min Daily. Some workers said they heard loud bangs and some cables snapped.

According to the Chinese paper, some tried to escape by jumping off the rig into the sea. A worker who spoke to the evening daily said he decided to swim to safety because the gangway bridge linking the rig to the shore were crowded with workers.

Preliminary findings showed that the three-legged jackup rig tilted to one side after the jack-up mechanism of one of the legs failed to work.
 
 
A failed braking system might had caused the oil rig to tilt to one side. Providing an update on the incident to the media, the shipyard initial investigations showed the braking system on one of the movable legs of the rig had failed, causing the platform to slide down the leg on that side. Load tests run on the rig just a day before the accident had shown the three legs of the rig could bear a load of some 9000 tonnes each. The yard is now trying to stabilize the rig so that it can investigate the cause of the brake failure.
 
 
How Rig Tilted
Above Courtesy of Straits Times
 
Earlier, Singapore Minister for Manpower praised evacuation efforts at the yard, saying he was encouraged that all the workers on the rig had been evacuated within 20 minutes.



The new JU3000N design is the result of the combined development efforts of Jurong Shipyard, Noble and Friede and Goldman in creating an enlarged hull that will offer more operational benefits, including ergonomic and efficient accommodation layout, increased deck space and placement of equipment that will allow the crew to efficiently and safely carry out maintenance duties. On completion, the new rigs are capable of operating in waters of 400 feet and drilling depths of 30,000 feet.

The rigs are suitable for operations in many challenging environments, including high temperature areas such as the Middle East and in the North Sea.


General information about a typical offshore drilling jackup :-

The conventional jack-up design has three vertical legs, each leg normally being constructed of a triangular or square framework.

Jack-up basic design involves numerous choices and variables. Typically the most important variables may be listed as stated below.

Support Footing -

The legs of a jack-up are connected to structure necessary to transfer the loadings from the leg to the seafloor. This structure normally has the intended purpose to provide vertical support and moment restraint at the base of the legs. The structural arrangement of such footing may take the following listed forms;
-gravity based (steel or concrete),
-piled
-continuous foundation support, e.g. mat foundations
-individual leg footings, e.g. spudcans (with or without skirts).

Legs -

The legs of a jack-up unit are normally vertical, however, slant leg designs also exist. Design variables for jack-up legs may involve the following listed considerations ;

-number of legs
-global orientation and positioning of the legs
-frame structure or plate structure
-cross section shape and properties
-number of chords per leg
-configuration of bracings
-cross-sectional shape of chords
-unopposed, or opposed pinion racks
-type of nodes (e.g. welded or non-welded (e.g. forged) nodes)
-choice of grade of material, i.e. utilisation of extra high strength steel

Method of transferring loading from (and to) the deckbox to the legs

The method of transferring the loadings from (and to) the deckbox to the legs is critical to design of the jack-up. Typical design are ;

-utilisation and design of guides (e.g. with respect to ; number, positioning, flexibility, supporting length and plane(s), gaps, etc.)
-utilisation of braking system in gearing units
-support of braking units (e.g. fixed or floating systems)
-utilisation of chocking systems
-utilisation of holding and jacking pins and the support afforded by such.

Deckbox -

The deckbox is normally designed from stiffened panel elements. The shape of the deck structure may vary considerably from being triangular in basic format to rectangular and even octagonal. The corners of the deckbox may be square or they may be rounded. Units intended for drilling are normally provided with a cantilever at the aft end of the deckbox, however, even this solution is not without exception and units with drilling derricks positioned in the middle of the deckbox structure are not unknown.


Below are some news from the web as of 13th Dec 2012, that Dalian Shipbuilding Industry Corporation Offshore and Shanghai Waigaoqiao Shipbuilding have received notifications from F&G to stop work on the jacking systems of eight JU2000E units, according to news sources.  Work has been put on hold on six jack-ups being built at Dalian under contracts awarded by Norwegian rig giant Seadrill and Houston-based drilling start-up Prospector Offshore Drilling.  
CIMC Raffles is building two F&G JU2000E jack-ups, including one for new drilling start-up Varada HVR, but it has not received any correspondence from F&G to halt work on the units.

The jacks for the JU2000E are believed to be from South Korea manufacturer where the JU3000N are sourced from a Chinese supplier. All jacks ordered by Chinese yards are believed to be fabricated under the joint efforts of the South Korean manufacturer and Chinese yard operator ZPMC, which bought F&G for $125 million in 2010.


Below video downloaded with courtesy of youtube which shows typically the sequence of jacking the rig up and down to test the smooth functioning of jacking system.




 
Refer below links in my previous posts for more of drilling jack-up relevant information  :-




Sunday, December 2, 2012

Construction of a cantilevered bow turret for FPSO



Courtesy of MODEC
FPSO Whakaaropai
Location: Maui B Field, New Zealand
Client Name: Shell Todd Oil Services Ltd.
Installation Date: August 1996
Water Depth: 110m (361ft)
Tanker Size: 135,510 dwt
Vessel Type: MODEC Converted FPSO
Storage Capacity: 750,000 bbls
Fabrication: External Cantilevered Bow - Singapore
Vessel - Singapore
External Turret Mooring Systems provide an excellent solution for a wide range of FSO/FPSO applications.

These proven single-point mooring systems permit the vessel to freely "weathervane" 360 degrees, allowing normal operations in moderate to extreme sea conditions. External turret systems are less expensive than internal turret designs and can be delivered in a shorter period of time, making them an excellent choice for many applications. External Turret Mooring Systems can be mounted at either the bow or stern of converted tankers or new-built vessels. External turret systems are designed and built for a few risers, in shallow water, for moderate environmental conditions but pending on some customer and market requirements, turrets could be designed and extended in technology for use in harsh environments and to support a large number of risers and flow throughput. The FPSO Whakaaropai (Maui-B), offshore New Zealand, was developed to withstand 10.6m significant seas and support two large risers in 110 meters of water. The turret mooring required the design and development of a high load capacity and fatigue resistant turret and turret support system.

Design Environmental Criteria (100-year storm) :-
Significant Wave Height: 10.7m (35.1f)
Wind Velocit: 40.2m/s (74.5 knots)
Current: 1.1m/s (2.2 knots)

Mooring System :-
10-leg Chain-wire-chain asymmetric catenary:
6-in. ORQ chain, 4.375-in. ORQ +20% top chain
5.5-in. 6-Strand wire rope, 24mt and 32mt High holding power drag embedment anchors

Fluid Swivel Assembly :-
Crude Oil: 1 x 12-in. piggable toroids
(680 psi design/1,025 psi test)

Produced Gas: 1x 6-in. piggable in-line (2,550 psi design/3,850 psi test)

Riser System :- 1 x 10.5-in. Flexible riser, 1 x 4.5-in. Flexible riser

When designing turret mooring systems for ship-shaped vessels, one of the most important vessel design factors affecting the mooring line tensions is the location of the turret. The farther forward the turret is located away from the mid-ship, the easier it becomes for the vessel to weathervane into an equilibrium heading under non-collinear environments.

However, the farther away the turret is placed, the more the vertical motions at the fairleads due to the vessel pitch will increase, which could have an adverse effect on the mooring line tensions in the line dynamic mooring analysis.  When considering the total impact of the turret on the hull, the bow turret has proven more cost effective in both benign and harsh environments.

The bow turret can be configured in two ways: Integral bow turret (built within tanker bow)  or the Cantilevered bow turret as in the Whakaaropai FPSO.
 
A fully weathervaning vessel has operation expense advantages over a controlled heading limited rotation vessel, but the inherent requirements of a swivel joint for each flow path imposes practical limitations on the number of flow paths that can be provided for a fully weathervaning vessel.

Whilst all turret systems are disconnectable, the term is only used for turrets having the facility for quick connection and quick disconnection (QCQDC). Most of the turret systems that have been designed for fairly benign weather and shallow water are disconnected when typhoon is expected.
 
In 1995, one of my first project in the shipyard's subsidiary is the construction of the 750ton gross weight turret which involves alot of thick welding ( on the chain table where steel thickness ranges from 4 to 6 inches ) and there is need to understand where to use temporary bracing ( using 6-8inch diameter heavy schedule pipes) to hold the chain table reinforcement structures to prevent weld shrinkage and unexpected weld cracks. This crack could be heard with loud "explosion" sound when it happened. The chain table is main core structure that seats the big 6 metre diameter roller bearing ( costing turret designer few mils to order ) and this roller bearing allows the turret to freely weathervane so that the tanker can take up the position of the least resistance to the prevailing weather, at all times. I recalled that the stud bolts for holding this big bearing is sized approximately 2.5inch diameter by 3feet length. One person would have hard time trying to carry this heavy stud.  Bolt tensioning by hydraulic system was done on these 100plus pieces of studbolts.This stretching/elongation is maintained by the head of the bolt and the nut on the joint thereby maintaining the joint at the desired tension (Bolt tensioning).To produce clamp load, the bolt must be placed in tension. If the bolt is not stretched then there is no clamping load. The bolt start to stretch elastically (not reaching the yield), proportional to the amount of nut advancement. As the nut is further turned by the "tommy bar" the threads of the bolt and nut are forced together under enormous pressure generating friction between the mating threads and also causing tensional twisting to the body of the bolt between the clamped surfaces. The bolt is experiencing two forces simultaneously, tension and torsion.
In a bolted connection, the bolt must be stretched sufficiently to produce static preload upon the connection that is greater than the expected external load rather than the joint assembly acting upon the bolt themselves. These external loads must be known so that the proper grade, size, diameter, thread pitch and number of fasteners can be chosen to create a safe joint or fastening.


As a rule, the joint will have been designed with sufficient fastener to apply the required clamp load at 65% of the fastener proof load stress figure i.e. well below the fastener’s yield point. There is also an auto-greasing system connected by stainless steel tubing with over hundred grease outlet points around the perimeter of the roller bearing and the timing of autogrease is done through the small auto programming pack.
 

Courtesy of Bolt tight


The chain-table forms the connection point for the anchor lines of the turret mooring system to the FPSO vessel. Mooring loads are transferred from the chainhawse connection points through the chain-table structure to the turret and the main weathervaning bearing into the ship’s bow structure. The chain-table also provides the entry points for the product risers and houses the foundations for the bend restrictors (as required). The chain table after fabrication weighs about 250tons and would required to be post-weld heat treated due to the welding sizes of exceeding more than 2 inches.  A temporary shed was moved into the workshop where the chain table was completed and prepared for gas fired to heat the 250ton steel to 650degree centigrade and holding at this temperature for two hours and then letting it cool down to ambient temperature.  About 200bottle of LPG gas with 3 to 4 gas burners were mobilised to do this PWHT treatment. Spent about $70k internal insulating the shed enclosure to keep the temperature inside and preventing much heat loss to the outside. After this heat treatment process, weld stresses relieved, an Australian machining company Furmanite was called in to carry out the laser level chain table bearing surface machining.
 
The Chainstoppers and Chainhawses :-
Ten chain hawse supports, each consisting of two cast steel pieces having a hook shape, are welded to the chain-table deck. The chain hawse assemblies complete with chainstoppers are fitted into the hooks via a self lubricated bearing which allows the chain hawse to rotate and align with the chains. A tubular guide trumpet ensures proper alignment of the chain during tensioning and helps the articulation of the chainhawses.

The turret also consist of a patented design Swivel Stack Assembly. The swivel stack assembly consists of an inner non-rotating ring and an outer rotating ring that encloses a toroidal shaped chamber. The individual swivel rings are stacked atop of each other to provide multiple independent flow paths. The inner and outer ring concentricity is maintained by triple race roller bearings. Seals around the periphery of the interface between the inner and the outer rings prevent leakage of the working fluid.

The swivel design is based upon the following guiding principles:

-Swivel redundancy
-Flow re-routing as back mode of operation
-Ease of maintenance with minimum intervention
-Maximum use of field proven designs
Some design the driving arrangement of the swivel stack as integral part of the overhead frame-work structure. An individual driving ring is supported at two opposite sides by a fork arrangement. Each swivel unit is therefore driven on both sides of the outer ring simultaneously resulting in a pure driving torque with no net shear being applied on the piping flanges.  The swivel sealing system incorporates double seal sets in each module. A leak detection system and recuperation system is built-in between the seals which collects any product fluid and returns it to the production flow.  



After completion of post weld heat treatment and special laser level machining done by Furmanite, the 250ton chain table is being moved out for the main hull assembly and installation of the main 6metre diameter slew roller bearing.




Installing the main turret hull to the chain table ( left hand side )

  

                         
                                                   Above is sample setup - not actual one as I could not find from my archives machining video of chain table
Furmanite Australia was engaged to carry out machining of the approx. 6m diameter chain table. At that time, the mobilisation and machining cost for the job was almost more than quarter mil. They supply and use a range of specialized self-levelling rotary milling machine fixed to a rotating beam arm. These are ideal for use in machining very large circular or irregular shaped surfaces. Circular faces up to 45m (150 feet) or rectangular faces up to 11.5m by 11.5m (38ft x 38ft) are able to be machined in a single set up. The machines follow a reference plane electronically, utilising the strength of the item being machined for support. This allows the use of lightweight machines. The machines are highly adaptable, allowing for machining of all faces                                                       from vertical to inverted.

The machine uses a laser controlled actuating system to raise and lower the cutting head which in turn maintains the flatness and “best fit” for the service.

Capacities and range of Machining could work up to :
• CLLM : 2.5m – 24m (8’ – 80’) diameter
• Low profile CLLM : 1.8m – 4.1m (6’ – 13.5’) diameter

Friday, October 26, 2012

Leonard T. Roe - An experience driller and toolpusher


In August 2004, I was on my way to Stavangar to attend the Offshore exhibition ( similar to that of OTC yearly held in Houston, though I had been to Houston many times but never been to OTC ever ) and I had made a purpose stopover trip to London Heathrow Terminal 3 for the first time to meet up Leonard Roe ( Len, in short after we known each other ) for an interview to be our drilling engineer. I got to know Len through his "Workover" drilling website and found him likely suitable candidate to fill our company's vacant post after speaking to some other candidates of similiar triats and experience.  A fit British army in old days, Len was a toolpusher in the early 70s' and had worked for Maersk back then. I landed at Heathrow airport, it was usual over crowded and packed and but somehow it was not that difficult to find Leonard at one of the counters where you book for a cab. At first sight, Len gave me the impression of the "roughneck" type with strong and big physique. We had some food in the hotel cafe and then we move on for an "informal" interview.  Len showed me his past credentials and his working experiences and his current work as drilling well control instructor and presenter. He had given me some of powerpoint presentations and he showed me very keenly and proudly his work, how he did his animations in powerpoint. I had the whole night assessing and understanding his working experience and his knowledge in well control and offshore drilling. Flew back to office after the purposed trip and discussed about Len's work to our management. After some track record checks and reviews, we finally hired Len in November that year. Len left us 2010 and had to return UK to further his treatment on his throat and I have no idea of his present condition whether he is improving or not. He has a son in the twenties and wife is in home care due to old age. Hope Len is still around and busy with his stuff on his website, www.drillfloor.com
Part of my in-between flight schedules while on way to ONS2004 exhibition:

Wed, Aug 25: SCANDINAVIAN AIRLINES, SK 0505
From: COPENHAGEN, DENMARK (CPH) map Departs: 2:55pm
Departure Terminal: TERMINAL 3 Gate: Check for latest information
To: LONDON HEATHROW, UNITED KINGDOM (LHR) map Arrives: 3:50pm
Aircraft: MCDONNELL DOUGLAS MD-90 JET Mileage: 594
Flight Time: 1 hours and 55 minutes

Thu, Aug 26: SCANDINAVIAN AIRLINES, SK 2520
From: LONDON HEATHROW, UNITED KINGDOM (LHR) map Departs: 10:45am
Departure Terminal: TERMINAL 3 Gate: Check for latest information
To: STAVANGER, NORWAY (SVG) map Arrives: 1:30pm
Aircraft: BOEING 737 JET Mileage: 554
Flight Time: 1 hours and 45 minutes


Leonard T. Roe
Rig manager and Drilling Superintendent
 

From November 2004 until November 2010 (6 one year contracts) held in the position of consulting Principal Engineer Drilling in Singapore to assist in setting up a drilling team.  This position involve the over view of the planning and designing of the rig floor and associated drilling components, and the systems associated with the Rig Technology of the many new builds, much of the onsite involvements carried out included, rig inspections during the construction phase, function testing installed equipment, and commissioning.

Offsite involvement included, sitting in on meeting with customers, checking and suggesting the rearrangement of drawings and layouts, writing seminars and lectures for both management and engineers as and when needed. Such seminars were run in Singapore, Abu-Dubai, and India. And would often include both yard personal and many of their customers.

Leonard was a freelance training instructor and consultant compiling and instructing/teaching aids for distant learning classes on rig design and functions while recovering from cancer, many of the subject can be seen below.

Some of his Lessons written in the past include:

Casing and Cementing
Fishing tools and their functions
Stripping and Snubbing
Bops' Atmospheric d-gasser and the Accumulator, kill and choke manifolds
Drill string Design
The circulating system
Drilling Hydraulic
Oil well completions and Workover
Introduction to casing while drilling
Rig Safety
Workover operations
Ton miles and wire line safety
Bulk Storage Systems
Mud Mixing system
Solid control systems Mud Cleaning and shaker area including D-gassers
Top Drive
Rotating Mouse Holes
Fox Holes
Pipe Deck Machines
Power Slips, PS30, PS21, PS16
Iron Roughneck TS80, AD4500, AD3200, Jim
Hydraulic Cat Heads
Hydraulic Power Units
Hydraulic stabbing boards
High Pressure Piping Systems this includes Valves, All manufactures
Conductor Tensioning Units (CTU)
Diverters Vetcogray and Cameron
Rig Pumps (fluid end and power end)
The crown and crown block assembles
The Stand Pipe Manifold
The choke Manifold
The trip Tank design an function

I have uploaded here some of Len's work below which he has given personally to me for sharing,
( P/s  the correctness of the information here below are not being counter-checked and to be used with discretion )  :
Rigfloor equipment2


Rig Controls at Drill Floor



Bulk Mud System


Optimizing Solids Control


Iron Roughneck


Slush Pumps


Top drive


What is an Accumulator1



Underbalanced Drilling


Surface Cement

RC Bits


Casing 2


Gas Cut Mud


Liners



Deepwater BOP Riser


Diverter Systems


Well Head