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Oil treatment firm boss bullish about the future

It could have been so different for Glen McLellan.

WELL RUNS DEEP: Glen McLellan is relishing Opus's new contract. He is back on Orkney, having turned his back on rearing cattle to join the oil exploration industry.
WELL RUNS DEEP: Glen McLellan is relishing Opus's new contract. He is back on Orkney, having turned his back on rearing cattle to join the oil exploration industry.

If he had stuck with his first career choice on leaving school in Stromness, he would be helping breed Orkney's renowned beef cattle on the farms he had worked on since he was 10.

He is still working on Orkney. But instead of going to bull sales, he is about to immerse himself in a major research project aimed at getting the last drops of oil out of aged North Sea wells, transforming the economics of a field while reducing the impact on the environment.

Working on desktop studies and lab testing, he will be rubbing shoulders with some of the giants of the global oil industry – BP, Shell, Statoil, Total and Wintershall. They have commissioned Opus to do the work at its Flotta oil terminal unit, which is now operated by Talisman.

News the Guildford-based Opus, which specialises in oil treatment processes, had been awarded the £430,000 joint industry project (JIP), was announced yesterday. It is the latest chapter in the remarkable story of the Flotta facility, which was taken over by Opus 10 years ago without ever having made a profit.

Now it is an integral part of Opus, which had a turnover of £4.8 million for the year ending May 2011, with 16% profit. Significant figures for a workforce of just 40, with 25 on Flotta, only one not an Orcadian, and 15 in Guildford.

According to Mr McLellan, now director of strategic operations in Opus, it is a company whose time has come with the increasingly stringent environmental regulations being imposed by the Department of Energy and Climate Change on the oil industry.

It has developed its own pioneering methodology for carrying out a Best Available Techniques/Best Environmental Practice study for oil companies. It sends its scientists and engineers offshore to survey a platform's operation and identify areas for improvement.

Mr McLellan arrived at the Flotta oil terminal in 1988 at the age of 17, shortly after the test facility had opened. Having turned his back on agriculture he had a mechanical technician's apprenticeship at the terminal, which was then operated by Occidental, before coming under the ownership of Norwegian oil company Kværner in 2000.

After a spell in Singapore, he returned to Flotta as a project engineer in the test centre.

It had been established in 1988 by the Institute of Offshore Engineering from Heriot Watt University and sponsored by, in the main, Conoco Phillips, Occidental and Orkney Islands Council. The test centre had been set up to develop waste water treatment technologies, an onshore facility where offshore conditions could be simulated. One of its prime challenges was how to deal with produced water.

Mr McLellan said: "Produced water is the water that comes out of the reservoir with the oil. It is separated from the oil and needs to be cleaned up before it can be put back into the sea.

"When a new platform starts working, it is dealing with dry oil, which has no water. But the longer it is extracting oil, the more water gets into the well. In the late 1980s, the North Sea industry started to produce more and more of this water and realised it was going to have to clean it somehow."

He said a crucial date was the arrival of Nigel Weir in 2001. He had a company in Guildford called Naremco Technology, which was working on separation technologies.

"They were looking at a sub-sea separator, and the testing was all being done here. Kvaerner was looking to shed all its non-core assets, so Nigel moved to acquire Environment Resource Technology."

The Flotta unit's name was changed to ETR Orkney Ltd. It started to work closely with Naremco, and the two became one, as Opus in 2003.

Two years later it supplied its first Compact Flotation Unit (CFU) to Hess for the Triton FPSO, a double-hulled floating processing tanker. The CFU had been designed by Opus to deal with produced water.

"It was a combination of several technologies we had developed," said Mr McLellan. "It was driven by the fluids, which normally arrive in the platform under the pressure in the well.

"They arrive in the CFU under pressure at a tangent so they spin the CFU round. When it is spinning, it creates centrifugal force and, because water is heavier than oil, it goes to the outside and the oil comes to the middle and is removed by gas flotation.

"It is highly efficient and entirely robust. There is no problem with any motion. On Triton it was commissioned during a force 10 gale and the boat was all over the place, but when we switched it on, it worked perfectly."

Three other CFUs were sold at about £1m apiece.

"We have four working now. One on the EnQuest Heather Platform in the UK sector of the North Sea. Another is in the Danish sector of the North Sea on MaERsk Gorm platform, and we have one out in Brazil, on the Maersk Peregrino FPSO."

The last serves the two platforms on the Peregrino field, commissioned last year off Rio de Janeiro, with a production capacity of 100,000 barrels a day.

With estimated recoverable oil of up to 600 million barrels, the Peregrino field is Statoil's biggest outside Norway.

"We have had fantastic feedback," said Mr McLellan.

"We are getting a huge number of inquiries from the Middle East, West Africa and the Far East and there is still interest in Brazil. We are currently bidding to supply worldwide and are refining the CFU all the time."

Opus also has an eco-toxicology lab on Flotta.

Mr McLellan said: "Basically all the chemicals that are used in a marine environment have to be tested to look at their toxicity to the marine environment and we do all that, testing crustaceans and other types of beasties. It has become an important part of the business."

All a far cry from tending cattle outside Stromness.

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