Marathon Oil’s Alba field development is vital to the Company and to the economic and social progress of our host country and citizens of Equatorial Guinea.
We extract condensate and natural gas from the offshore Alba field to supply three Marathon Oil-operated plants on Bioko Island that process these resources and produce methanol, liquefied natural gas (LNG) and other products. Alba is the sole source of cooking gas and liquefied petroleum gas (LPG) for the island’s 350,000 residents, as well as of gas for Bioko Island’s only power station.
To sustain the benefits of our business interests in Equatorial Guinea, Marathon Oil invested in a major offshore engineering and construction project to boost production from Alba. Adding a compression platform to Alba B3 extended field life beyond 2030, the field production plateau by approximately two years and the field economic life by approximately eight years. This allows Marathon Oil to continue generating cash for our business, revenues for Equatorial Guinea and jobs for Equatoguineans. It also enables us to continue supporting the life-saving Bioko Island Malaria Control Project and numerous educational, health and community assistance programs in Equatorial Guinea.
Alba B3 involved building a new offshore compression platform (greenfield component) that is a bridge connected to our existing Alba offshore production facilities. This required modifications (brownfield components) to existing facilities to tie-in the new platform’s utilities, process control and safety systems with the existing facilities. The project involved the work of employees, a primary contractor and subcontractors on multiple continents, speaking different languages and from different cultures.
Our goal in Equatorial Guinea is to support local suppliers and use them whenever possible. From 2008 to 2014, our national content spending increased every year, boosted by procurement for the Alba B3 project. In 2015, our total spend with all local companies was approximately $92 million.
Marathon Oil saw the Alba B3 project as an opportunity to develop local content and build national capacity specifically in engineering, fabrication and other services, while adhering to U.S. performance standards. We contracted with a West African engineering firm and an Equatoguinean construction company to perform key project activities. These contractor relationships represented the first time Marathon Oil hired a regional company to complete engineering work in Equatorial Guinea and also one of the largest fabrication projects executed by an Equatoguinean firm.
Both firms completed their respective project scope on schedule in 2015, on budget and with good overall safety and environmental performance. The construction firm successfully fabricated the critical bridge and flare structures for the platform, the two largest jobs in its history. Having engineering resources on the ground in Equatorial Guinea allowed us to better assess brownfield design and work directly with Marathon E.G. Production Limited (MEGPL) Operations and Maintenance personnel, which helped reduce risk on the project.
As part of our commitment to local content and capacity building, Marathon Oil required a training program by the local engineering contractor for four Equatoguineans to pique their interest in design and engineering and to experience a professional team atmosphere.
In addition, two representatives of the Ministry of Mines, Industry and Energy (MMIE) worked with the Alba B3 project team in our Houston office to learn project execution. They gained insights into U.S. and European occupational, health, safety and environmental standards that they can apply directly to future large-scale projects in Equatorial Guinea.
Two Marathon Oil Equatoguinean employees filled important roles in Houston on the B3 project team. The MMIE representatives and the Equatoguinean employees returned to their home country with an enhanced skill set.
Marathon Oil took steps to protect the safety and health of the approximately 130 subcontractor workers who were involved in the hookup and commissioning of Alba B3. We monitored their hours of work, implemented workplace controls to minimize fatigue and heat stress, and ensured that comfortable off-duty offshore living quarters were provided. Arrangements were in place with the local hospital and an MEGPL medical facility in Malabo operated by International SOS for medical and health needs, as well as with other oil and gas operators for helicopter medical evacuation. In addition, the floating hotel supporting the Alba B3 installation, hookup and commissioning was inspected by accredited third-party marine surveyors for compliance with international standards on life safety, food and water quality, hygiene and sanitation, and pollution prevention.
MEGPL provided mandatory safety training for all offshore crews. Our primary contractor promoted a strong safety culture and Marathon Oil engaged management in the construction yard to remind them of the Company’s safety expectations. At quarterly subcontractor HES forums, we reviewed our expectations and results and required contractors to make presentations on their own HES culture and programs. The safety efforts resulted in a Total Recordable Incident Rate (TRIR) of 0.0 for during installation.
Prior to starting Alba B3, Marathon Oil voluntarily assessed the project’s environmental and socio-economic impact. We stringently enforced World Bank and World Health Organization (WHO) guidelines for health, safety and environmental protection throughout the project. Our dispersion modeling to assess the impact of Alba B3 air emissions on the people of Bioko Island determined that the air quality will meet WHO standards when Alba B3 is operational starting in mid-2016.
Additional environmental mitigations included marine mammal observation and procedures to minimize underwater noise from pile hammer operations; waste management measures including proper waste collection, segregation and onshore disposal; and zero discharge of oil or hazardous substances to the ocean. There were zero environmental incidents during the installation of the Alba B3 facilities.
We minimized local impacts of the project, including coordinating with the local government to plan the onshore loadout and transportation of the bridge and flare structures. This lessened traffic disruptions, reduced the risk of public safety incidents and prevented the need to relocate homes and businesses along the transportation route.
Marathon Oil's actions to manage the Alba B3 compression project are an example of our commitment to develop the human resources of Equatorial Guinea as well as the oil and gas resources. The project provides stable production and cash flow from the Alba field beyond 2030 and allows Marathon Oil to continue contributing to sustainable social programs that build national capacity and improve wellbeing in Equatorial Guinea. We consider the Alba B3 project a model of sustainability for Marathon Oil going forward.