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FixO3 - Deliverable D5.2: List of Current Commercial Sector Needs from Ocean Observatory Sector
Project 312463 - Fixed Point Open Ocean Observatories Network
Work Package number WP5
Work Package title Innovation Through Industry
Deliverable number D5.2
Deliverable title List of Commercial Sector Needs
Description Meeting between open ocean observatory researchers and the commercial sector to discuss current advances in marine technology/research and what the commercial sectors needs/requirements are over the next 5-10 years (discuss the likely 5 innovative products/services)
Lead beneficiary SLR
Lead authors Nick O’Neill (SLR), Charlie Carlisle (SLR)
Contributors IFEMER, UiT, UPC
Submitted by Luisa Cristini
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I. Introduction ........................................................................................................................................... 3
II. Background ............................................................................................................................................ 3
III. Method of Investigation .................................................................................................................... 4
i. Conferences attended ....................................................................................................................... 4
ii. Stakeholder Engagement .................................................................................................................. 4
IV. Results and Findings .......................................................................................................................... 5
i. Our Market ........................................................................................................................................ 5
ii. Ocean Observatories and the Offshore Oil & Gas Industry ............................................................... 8
V. Recommendations ................................................................................................................................. 9
ANNEXES ...................................................................................................................................................... 10
References ................................................................................................................................................... 10
Table of contents
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I. Introduction
The objectives of WP5 of FIXO3 is to promote interaction between the ocean observatory research community and the commercial sector, proactively promote FixO3 and wider open ocean observatory products and services to the commercial sector, identify innovative products & services within the ocean observatory community and develop targeted IPR agreements to encourage interest by the commercial sector. There is a need to commercialize- and ultimately create jobs- from ideas developed through publicly-funded research. The most relevant indicators of commercialisation performance are the rate of spin-out company formation and the number of technologies licensed to industry. This report summarizes the deliverable of Task 5.2 which was to meet with open ocean observatory researchers and the commercial sector to discuss current advances in marine technology research and identify the needs of the commercial sector over the next 5 to 10 years. Matching innovative scientific products with commercial needs will lead to spin-out company formation and the licensing of new technologies by companies.
II. Background
The ESONET, ESONIM and ESONET Network of Excellence projects included tasks that addressed the potential end users of ocean observatory data products and services. The opportunity for ESONET is to combine their product (data from ocean sensor infrastructure) with services (data processing, interpretation and forecasting) to deliver medium term value while engaging in pure scientific research that will drive innovation in the future. There is increasing commercial interest by the private sector in using ocean observatories for environmental monitoring. Below is a PEST diagram that illustrates some of the external developments that present opportunities to the ESONET business:
Sociological Technological
Recognition of climate change
Fears about environmental damage
Public fascination with ocean life & secrets
Fears about tsunamis & earthquakes
Security fears
More smart sensors on the market
Improved bandwidth
Better power systems for remote subsea operations
Increased access to broadband in homes
Reduced costs for fibre optic cabling
More off the shelve solutions
Economic Political & Legal
Increasing private sector spend on environmental monitoring
Public sector investment in innovation as driver of economic growth
Increasing natural hazard insurance claims
Investment in bio-prospecting by pharma industry
New markets in emerging economies
Demand for environmental security
Need for marine spatial planning
Drive for sustainable development of marine resources
UNCLOS & need for international oversight of deep ocean resources for common good
The contract award notices in the marine sector relevant to ESONET were reviewed in 2010 by the ESONET
NoE and updated in 2013 (see Annex 3). The findings of the review in 2010 concluded that:
1. There is a market for the products and services developed by the partners of the ESONET NoE.
2. Most of the customers are US, European and national research agencies, military navies, coast
guard agencies and the oil industry.
3. There was an increase in the number of large value contracts originating from the growing
economies of Brazil, Russia, India and China in 2010.
4. European companies are winning these contracts against stiff competition from US companies.
Investment by the public sector in ESONET infrastructure in Europe will be a driver for innovation that will
supply more products and services to the growing economies in Africa, Asia and the Middle East.
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This report updates the market research work of the 2010 ESONET NoE Report and identifies the current
advances in marine technology/research and what the commercial sector’s needs/requirements are over
the next 5-10 years.
III. Method of Investigation
An indicator of commercial interest in products and services from ocean observatories is the number of contract awards that have been made in 2013 for these products and services. Contract awards for 2013 were reviewed on websites and in maritime industry trade journals to identify current needs and requirements for products and services associated with ocean observatories.
A number of one-to-one meetings were organized with private equity companies that provide venture
capital investment for early stage companies with pioneering technologies. A number of ocean observatory
technologies at TRL7 stage were presented including water quality sensors, anti-biofouling and deep water
power and control systems. The meetings provided an opportunity to obtain insights into the future needs
of, in particular, the oil exploration industry which is increasingly moving into deeper water as new oil and
gas prospects are being discovered.
i. Conferences attended
A number of conferences and workshops were attended in advance of and after the FixO3 Project commencement date with a view to identifying FixO3 suppliers who had products and services they wished to commercialise and potential service company partners who have access to new markets.
Title Location Date Remarks
SPE Offshore Europe
Conference & Exhibition
Aberdeen 3rd – 6th September
2013
Showcases the innovation,
solutions and tools
required to operate in the
offshore Oil & Gas Sector
UK-IMON International
Workshop on New
Monitoring Technologies
Southampton 10th – 12th
September 2013
A workshop to identify
those technologies that
can increase the efficiency
and reduce the cost of UK
marine monitoring over
the next 5–10 years.
Oceanology International
2014
Excel London March 2014 OilTech Investment
Network
European Maritime Day
Conference
Bremen
Congress Center
28215 Bremen
May 2014 EMD face to face meetings
with other maritime
stakeholders
EGU Vienna May 2014
The list of contacts that were interviewed is in Annex 1.
ii. Stakeholder Engagement
Stakeholder engagement began with interviews with FixO3 partners. WP2 collected all relevant technical information on hardware, software and middleware characteristics of each FixO3 site. WP12 has identified CO2 measurement, pH measurement and passive acoustic data processing as products and services to be further developed.
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At Oceanology International 2014 presentations were made to the Oiltech Investment Network. The
members of the Network include Altira Group LLC, a Denver based venture capital firm, BP Technology
Ventures, Chevron Technology Ventures, Conoco Phillips, Energy Ventures, based in Stavanger, Aberdeen
and Houston, GE Ventures, Investinor, a Norwegian government venture firm, Lime Rock Partners, Saudi
Aramco Ventures, Shell Technology Ventures, Statoil Technology Invest, and Viking Venture, a leading
Nordic technology focused venture firm. Discussions with these venture capital firms identified the qualities
that venture capital companies look for in start-up companies and the technologies that the oil industry
wishes to invest in to meet current and future challenges.
In addition invitations to apply for access to the FixO3 observatory infrastructure were distributed to
targeted exhibitors at the Oceanology International 2014 exhibition. The distribution of TNA invitations
allowed researchers Charlie Carlisle and Nick O’Neill to discuss current and future industry needs with
ocean engineering, communications, senor technology, environmental management, data interpretation,
management and processing, inspection, maintenance and repair and metocean companies.
The UK IMON International Workshop on New Monitoring Technologies held at NOC in September 2013
provided information on current and future industry needs from ocean observation.
The NeXOS Project, composed of 21 partners including public entities, companies and scientific
organisations from 6 European countries, is developing new cost-effective, innovative and compact
integrated multifunctional sensor systems (ocean optics, ocean passive acoustics, and sensors for an
Ecosystem Approach to Fisheries (EAF)), which can be deployed from mobile and fixed ocean observing
platforms, as well as to develop downstream services for the Global Ocean Observing System (GOOS), Good
Environmental Status (GES) of European marine waters (Marine Framework Strategy Directive) and the
European Common Fisheries Policy (CFP). Consultations were held with the NeXOS partners to better
understand the products and services that are required to implement new European marine policy.
IV. Results and Findings
i. Our Market
The estimated turnover in the UK based marine science and technology business in 2013 was £1.05 billion,
of which Oil & Gas makes up 39%, and the trend is upwards (Society of Marine Industries, 2013). The target
market within the marine science and technology business for products and services developed by ocean
observatories is the Ocean environmental monitoring & metocean analysis sector (Figure 1). The key
segments within that sector are Autonomy & Sensors (sensor technologies, biofouling & robotics) and
Marine Information & Computing Technologies. The problem for FIXO3 products and services in this market
is that ocean observation technology is largely at prototype (TRL 7) stage and lacks certification appropriate
for key market segments, such as oil & gas operations.
Figure 2 shows the breakdown of customers in the marine science and technology business. Oil and gas
companies make up nearly 40%. Renewable Energy and Environmental Monitoring also make up a
significant percentage of the marine science and technology business. There are emerging business areas in
biotechnology and carbon capture and storage (Baussant, 2013).
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Figure 1 Ocean Observatory Infrastructure
Figure 2 Market Size marine science and technology (Source: Annual Review of UK Marine Scientific Industries 2013)
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Figure 3 Market Trend marine science and technology (Source: Annual Review of UK Marine Scientific Industries 2012)
It is helpful to think of the marine science and technology business in terms of its supply chain with top tier
customer companies buying products and services from service companies who in turn buy products, such
as sensors, from manufacturing companies and data products from modelling companies. The tier 4
scientific ocean observation community is a potential source of data, products and services to tier 3 and 2
service companies (see Figure 4). In the case of ocean observatories, which are currently managed by the
scientific community much of the technology has been developed in the scientific laboratory to TRL 5 to 7
stage.
Tier 4
Tier 3
Tier 2
Tier 1 Oil & Gas E&P Companies
Environmental Monitoring
Service Company
Equipment & Sensor
Manufacturer
Survey Vessels
Providers
Metocean Forecasting
Service Company
Metocean Modellers
Products, data & services from ocean observatories
Figure 4 A Simplified Supply Chain Diagram for Oil & Gas E&P
Suppliers who have successfully commercialised products and services have a number of criteria in
common. They offer a clear value proposition to their customers; they have strong and credible
management; they have realistic expectations and they have prepared a convincing pitch.
Credible management usually has a track record of start-up companies; the principals demonstrate
emotional maturity under stress and they employ a strong well balanced technical team. The value
proposition shows the customer what is in the product offer for him. The product either saves the
customer money or creates value for the customer. The convincing pitch is about business, not the
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technology. It will show clearly the route to market with timelines. Risks will be identified with plans to
overcome or reduce them. The pitch will state how much of the owner’s money is invested, how much
venture capital is involved and how the money will be spent. The owners of the company will have realistic
expectations of the money to be made and must be prepared to give equity to venture capital investors.
These criteria will be used to guide the selection of partner companies and suppliers within FIXO3 wishing
to commercialise their products and services.
Since oil and gas companies make up almost 40% of the marine science and technology business this group of customers was examined in more detail. The oil and gas companies are top tier companies in the supply chain. They buy products and services from service companies who in turn purchase or lease equipment from manufacturers. They also buy metocean forecast models that are based on data supplied to metocean service companies by ocean observatories. The quickest route to market for innovative products and services from the ocean observatory scientific community is to obtain a patent and then partner with an offshore oil and gas service supply company.
ii. Ocean Observatories and the Offshore Oil & Gas Industry
Technology is critical to oil and gas Exploration and Production (E&P). Technology adoption is aligned with corporate strategy. The value proposition for adopting new technology must be linked to revenue generation. Oil and gas exploration companies are operating in deeper, colder water for longer periods to extract oil and gas from new deep water prospects. The ocean observation products and services on offer must reduce drilling costs, increase recovery, reduce health and safety risk, or avoid environmental damage (see Table 1). Ocean observation products and services contribute to providing legislative compliance with environmental policy and data and information to support E&P operational decisions. The tier 3 service companies that supply the oil and gas industry supply the same services to the offshore renewable energy sector, particularly for offshore wind and ocean wave energy converters.
Table 1 Services based on ocean observation data
Sector Segment Services based on Ocean Observation Oil and Gas Offshore Offshore Design Support Renewable Energy Offshore Metocean Information Services Marine Operations & Risk Environmental Assessment and Management
Current and wave data is used in offshore engineering design support for offshore structures and vessels. Data and information provided by ocean observatories improve the models used in metocean forecasting. Better metocean forecasting improves oil and gas E&P performance by allowing cost effective operational decisions to be made (e.g. when can a shuttle tanker come alongside an FPSO to take produced oil to market; what riser design is required for a new subsea development in deep water). Metocean service companies input ocean observation data to numerical modeling and analytical tools to generate a range of spatial and temporal wind, wave and current data products. These are used to understand the impact of the physical environment on offshore structures.
The cost benefit of environmental monitoring is that it will reduce the project lifecycle by supporting
regulatory compliance and therefore deliver early production revenue. Environmental monitoring will also
be an enabler to access new resources in deep water and Polar Regions.
Oil companies such as BP and Statoil are actively using ocean observatory infrastructure to support
environmental monitoring of E&P operations (e.g. http://www.delos-project.org/index.php).
As well as the data and data products there are also individual products or components of the ocean
observatory that may be of interest to the oil and gas service sector.
Credible Management
Clear Value
Proposition
Realistic Expectations Convincing Pitch
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For the science community TRL5 can be cost effective. Scientists may use “fit for purpose” scientific equipment for many years. However one anticipated outcome of R&D research funding is new products and services that could be commercialised to create spin off companies, revenue and employment. With this objective in mind the products and services currently used on ocean observatories were examined to identify suitable candidates for commercialisation. The ESONET Yellow Pages (http://www.esonetyellowpages.com/) which lists all of those products and services was examined. A number of potential candidates emerged (see Table 2).
Table 2 Innovative Products developed on Ocean Observatories applicable to Oil & Gas Deep Water Developments
Sector Segment Products developed on Ocean Observatories Oil and Gas Offshore Subsea Communications (e.g. Wi-Fi) Renewable Energy Offshore New Sensor Technology High Definition Cameras & Subsea LED Lighting Anti-biofouling techniques Subsea Connectors Passive acoustic monitoring & data processing
The products that are at demonstration stage which have applications outside the scientific community in environmental monitoring include innovative subsea communication, new sensor technologies (pH, water salinity, pCO2 , acoustic and optical sensors), anti-biofouling techniques, subsea connectors, passive acoustic data processing, and high definition subsea cameras with LED lighting.
The NeXOS Project has identified a number of priority products required by the ocean science community.
These include a bio-fouling protection system, a matrix-fluorescence sensor for the detection of dissolved
substances (such as polycyclic aromatic hydrocarbons) and (coloured) dissolved organic matter, a
hyperspectral cavity absorption sensor for investigation of phytoplankton and other absorbing
components, and a carbon sensor to measure carbon cycle relevant parameters such as pH, CO2 and CH4.
These technologies fit into the Autonomy & Sensors (sensor technologies, biofouling & robotics) segment
of the ocean environmental sector of the marine science and technology business and are potential
candidates for commercialisation.
V. Recommendations
In summary there is a market at this time for products and services developed by FIXO3 partners with
mainly US and European national research agencies, military navies, coast guard agencies and the oil
industry particularly in the area of environmental monitoring. There is a need for the public sector to give a
lead by including FIXO3 supplier companies in public procurement for ocean observation services. FIXO3
supplier companies must ensure that their product and service is at the appropriate technology readiness
level for deployment by industry and have a clear value proposition for their customers. For instance
accurate environmental monitoring in the oil industry reduces the risk of project delays with associated
revenue losses. The data supplied by ocean observatories is used by metocean modellers to improve
metocean and climate change forecasting. The end users of these models, for example insurance
companies, are often not aware of the original source of the data. Therefore FIXO3 supplier companies
must concentrate their marketing efforts on Tier 3 customer companies (see Figure 4).
Based on the analysis of consultees responses the following approach is recommended: FIXO3 suppliers
that provide products developed on ocean observatories with potential application in the offshore oil and
gas and renewable energy sectors (see Table 2) will be interviewed and their commitment to
commercialisation of their products assessed. Those willing to proceed will be advised on protection of
their IPR prior to identifying potential partners and routes to market.
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ANNEXES
Annex 1 : List of Contacts
Annex 2 : OilTech Investment Network Funders
Annex 3 : Contract Award Notices
References Baussant, T. (2013, September). A review and assessment of monitoring technologies with emphasis on oil
& gas: existing and promising sensing techniques. UK-IMON International Workshop on New Monitoring .
Society of Marine Industries. (2013). Annual Review of UK Marine Scientific Industries . London: Association
of Marine Scientific Industries .
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Annex 1 : List of Consultees
Name Company Description
Robin Stephens BMT Argoss Provide maritime, meteorological and oceanographic (metocean) consultancy services and specialise in weather forecasting, metocean operabilty and design and vessel response behaviour.
Adrian Boyle CathxOcean Provide integrated imaging solutions for ROV, AUV and fixed Observation platforms deployed in industries such as Oil & Gas, Oceanographic Research, Security & Defence.
Laurent Mortier Ecole Nationale Superieure de Technieques Avancees
ENSTA ParisTech belongs to the foremost graduate schools of engineering in France and keeps pace with changes in the leading edge technologies
Tomas Hvamb Energy Ventures Venture capital firm actively seeking early to mid-stage growth investments in companies that deliver a marketable, proprietary product or service with potential in the upstream oil & gas sector
Enrico Sassi Gas Survey Geophysical, geotechnical, seismic, bathymetric, oceanography, topographical and environmental surveys
Brian Terry Genesis Group Newfoundland
Marine technology commercialisation & business incubation
Craig Watson Harrison Goddard Foote LLP
Patents, Trade Marks, IP Solicitors
Jim Hanlon
Institute for Ocean Research Enterprise Canada
Brokering partnerships among industry, universities, government and private institutions, to enhance the competitiveness of ocean industries
Charlotte Lord Institute of Marine Engineering, Science & Technology
The international professional body for all marine professionals.
Rainer Sternfold Marine Explore Inc. Proprietary cloud platform for managing big data from the ocean scientific community
Gerry Scott National Oceanography Centre
Enterprise & Commercialisation Manager
Ian M. Leggett Ocean Expert Limited Retired Head of Shell Metocean Services now consulting
Tom Dakin Ocean Networks Canada Innovation Centre
Sensor Technology Development Officer
Mike Baker OTM Consulting Ltd Helping oil and gas operators and their suppliers to identify commercialise and deploy new technologies.
Dr Hong Kwang, Yeo Sonor Link Limited Technology Company
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Annex 2 : OilTech Investment Network Funders
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Annex 3 : Contract Award Notices
Contracting Entity Notice Type Contractor
NameAddress Main Activity Date of Contract Award Contract Award / Invitation to Tender Description of equipment and services Contract value Name2 Address3
Maritime and Coastguard Agency
Bay 1/05, Spring Place,
105 Commercial Road,
S015 1EG Southampton
UNITED KINGDOM
Surveying, hydrographic, oceanographic and hydrological
instruments and appliances11/08/2010 Contract award
Survey computers, on-line survey software, multibeam processing
software, seabed classification software, network server and removable
storage device, velocity dips,tidal observation equipment, land survey
equipment (for establishing tide stations)
1 213 640 GBP NetSurvey Ltd
Oathill Farm,
Claydon Road,
Croperdy, OX17
1QA Banbury, UK
European Commission, Directorate-General for
Enterprise and Industry, Directorate H —
Aerospace Industries, GMES, Security and
Defence,
Unit H3, avenue
d'Auderghem/Oudergem
selaan 45 (BREY 9/098),
1049 Bruxelles/Brussel,
BELGIUM.
Assist the Commission services in the evaluation, monitoring of
projects in the frame of the GMES initiative, and/or the
assessment/validation of products/services offered by those projects
N/A Notice date 28/4/2009 Call for EOISupport to evaluation of GMES proposals and/or monitoring of projects
and validation of GMES product and servicesEuro 339,000+ N/A N/A
European Commission, Directorate-General for
the Environment, SRD.2
BU 5, 00/122, 1049
Brussels, Belgium
Assisting the European Commission in setting up a Web-based
European clearing house enhancing information structuring and
sharing on climate change impacts, vulnerability and adaptation
17/08/2010 Contract award
Developing the concept, functionalities, scope, information sources,
data structure and Web user interface of the clearing house, on the
basis of a concept note drafted by the European Commission;
Eur 1,000,000Alterra — Stichting Dienst
Landbouwkundig Onderzoek
Droevendaalsestee
g 3/3a, 6708
Wageningen,
Netherlands
EuropeAid/130397/D/SER/SN. EDF National
Authorising Officer,
Directorate of Debt and
Investment, 25 rue
Amadou Assane Ndoye
X St Michel, PO Box
6843, Dakar Étoile,
Dakar, SENEGAL,
Preparing an integrated management plan for coastal areas (PGIZC),
integrating combating coastal erosion and adapting to climate
change
20/10/2010 ITT
Providing a tool to monitor the coastline, give alerts and help with
planning; building up the institutional and legislative framework for
managing coastal areas with a view to implementing the PGIZC;
producing a concerted draft integrated plan for coastal areas with the
various parties, covering the entire coastline of Senegal and in detail for
at least 4 target areas
1 100 000 EUR. N/A N/A
European Environment Agency
Kongens Nytorv 6, 1050
Copenhagen K,
DENMARK
Support the development of decision support tools for strategic
environmental policy issues13/05/2009 Call for EOI
Support the development of visualisation tools, model interfaces and
diffusion methods at different spatial and temporal scales (including
web, games, capacity strengthening), so as to provide decision support
tools in the appropriate format for decision makers.
N/A N/A
UK Met Office Fitzroy Road, EX1 3PB
Exeter, UKSupply of Meteorological Data Acquisition System 04/03/2010 ITT
Provide the Central Processing and Management System and supply of relevant sensors N/A
Brazilian Naval Commission (BNC) Supply of three oceanographic and meteorological data collection
buoys10/03/2010 Contract award
AXYS Technologies, Inc.
Chevron North Sea Ltd
Deepwater current measurements 23/10/2010 Contract award
900m mooring comprising a combination of TRDI 75kHz Longranger
ADCP, several Nortek Aquadopp single point current meters and an
RBR water level recorder
Metocean Services International
Sandy Bay,
Tasmania 7006,
Australia
U.S. Naval Facilities Engineering Command
Hawaii
Advance the design for an Ocean Thermal Energy Conversion
(OTEC) pilot plant off the coast of Hawaii.24/11/2010 Contract award
Develop critical system components and designs for an OTEC pilot
plant, which leverages the temperature difference between warmer
water at the ocean's surface and colder water below to produce clean
power.
USD4.4m Lockheed Martin
Far Eastern Regional Hydrometeorological
Research Institute (FERHRI) Russian Far EastProduction and delivery of an SAIC Tsunami Buoy (STB) system 25/05/2010 Contract award
Science Applications International
Corporation (SAIC)USA
Institute of Oceanology, Chinese Academy of
Sciences (IOCAS)
Complete handling system for an oceanographic research vessel,
including the ODIM CTCU deepwater technology,01/12/2009 Contract award NOK 44m ODIM Norway
Contracting Entity Notice Type Contractor
NameAddress Main Activity Date of Contract Award Contract Award / Invitation to Tender Description of equipment and services Contract value Name2 Address3
MeyGen Limited Renewable Energy April 17th 2012 Contract Award
Conducting both baseline and operational noise measurements from
prototype tidal devices to assess the potential effects of underwater
noise on marine life
Not known Kongsberg Maritime Ltd UK
US Department of Defense Defense Nov 11th 2013 Contract AwardEngineering services, repair and training support for the Navy's MK18 unmanned
underwater vehicle family of systems.$26,231,287 Hydroid Inc USA
Pacific Marine Environmental Laboratory (PMEL).
NOAAMarine Environmental Monitoring June 7th 2013 Contract Award Provide acoustic release transponders and associated equipment $2,500,000 EdgeTech USA
PEMEX Oil exploration Oct 25th 2013 Contract Award Ultra deep water geotechnical and pilot hole (drilling and logging) Not Known Fugro
Statoil Oil exploration Dec 26th 2013 Contract AwardSeabed engineering, trenching, cable laying etc for permanent reservoir
monitoringNot Known DeepOcean UK, Ltd UK