World of Oil and Gas
US to extend regulations to offshore contractors
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US to extend regulations to offshore contractors |
Michael Bromwich, head of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), announced that the US Department of the Interior will begin regulating offshore oilfield contractors and service companies, in addition to the operators currently overseen by the federal agency. Speaking at the Offshore Technology Conference in Houston, Bromwich explained that after conducting a comprehensive analysis of the events following last year’s sinking of the Deepwater Horizon and the Macondo oil spill, BOEMRE has determined that it has “broad legal authority over all activities relating to offshore leases, whether it is engaged in by lessees, operators or contractors.” He did not give a date on which BOEMRE would begin its new regulatory initiatives. |
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Greece, Azerbaijan sign gas deal |
Shell has announced the successful start of production from its Scotford Upgrader expansion project in Canada. The 100,000-bpd expansion takes upgrading capacity at Scotford to 255,000 bpd of heavy oil from the Athabasca oil sands. “This start-up is an important milestone for our heavy oil business,” said Marvin Odum, Shell Upstream Americas director. “And it adds new capacity from an important source of oil in a world requiring more secure energy.” Located near Edmonton, Alberta, the Scotford Upgrader processes oil sands bitumen from the Muskeg River Mine and Jackpine Mine, converting it into refinery-ready synthetic crude. With production capacity at the Athabasca Oil Sands Project now significantly higher, engineers will focus on improving operating efficiencies and adding capacity through debottlenecking. Shell believes these adjustments could boost output at the facility by an additional 85,000 bpd. |
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Coastal governors form drilling pact |
Republican governors from five coastal US states have formed a coalition to promote greater coordination between states and the federal government regarding offshore oil and gas exploration and development. The coalition was announced May 2 by Mississippi Gov. Haley Barbour at OTC. The other members are Louisiana Gov. Bobby Jindal, Texas Gov. Rick Perry, Alaska Gov. Sean Parnell and Virginia Gov. Bob McDonnell. In a letter of invitation to the governors of 20 other coastal states, the members stated that the coalition will serve “as a mechanism to foster an appropriate dialogue between the coastal states and the Administration and ensure that future actions are done with adequate state input.” This is the first time that state governments have created a group to lobby for more state involvement in federal leasing and development decisions. |
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Brazil to hold 11th licensing round |
Brazil’s national energy policy council has authorized ANP, the government oil regulator, to hold the country’s 11th round of licensing for oil exploration blocks. The round is scheduled to take place in the second half of 2011. This will be Brazil’s first licensing round in three years, since the discovery of huge oil reserves off the southeast coast. ANP said it will offer 122,000 sq km (47,000 sq mi) for exploration, but will not offer any areas in the prolific presalt areas where the largest recent discoveries have been made. Instead, the round will focus on the country’s equatorial regions, which hold five of the nine geological basins being offered. There will also be 87 blocks from traditional areas offshore, and also 87 onshore blocks. ANP said it will hold a separate licensing round for presalt areas, but did not give a proposed date. The five basins being auctioned are Foz do Amazonas, Para-Maranhao, Barreirinhas, Potiguar and Ceara. |
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Reliance finds gas, condensate offshore India |
Indian conglomerate Reliance Industries announced a rich gas and condensate discovery in the deepwater Cauvery-Palar basin off the coast of Tamil Nadu state, India. This was the first well drilled in the 3,300-sq-mi CY-PR-DWN-2001/3 (CYPR-D6) block, awarded to Reliance under the NELP III bidding round. Discovery well CYPR-D6-SA1, located in 3,920-ft water depth, was drilled to a target depth of 12,520 ft, terminating in crystalline basement rock. The well encountered multiple hydrocarbon-bearing clastic reservoirs in the Late Cretaceous. The presence of rich gas and condensate has been confirmed by several tests including modular dynamic testing and drillstem testing. During the drillstem test, the well produced 37 MMcfd of gas and 1,100 bpd of condensate from the main zone, which has a thickness of about 230 ft. |
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Petrobras to invest $73 billion in Santos presalt |
In its recently released annual development plan for the Santos basin presalt area, Brazilian oil giant Petrobras has earmarked $73 billion in total investments through 2015. This investment will more than double spending in the basin as ultra-deepwater fields there enter the more expensive development phase. Of the development activities planned, 74% is to be carried out directly by Petrobras. The company expects this investment to bring its total operated production to 613,000 bpd by mid-decade, an increase of 108,000 bpd over what was projected in the previous capex plan. The previously stated target of 1 million bpd of oil by 2017 will be raised, Petrobras said. The plan also calls for the construction of eight FPSOs at the Rio Grande Shipyard in Rio Grande do Sul state, the construction of up to 28 drilling rigs in Brazil, and the development of studies for a gas floating storage and offloading facility (FSO), designed to provide liquefaction at sea. |
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Ecopetrol announces new onshore discovery |
Colombia’s national oil company reported a hydrocarbon discovery in the municipality of Tello in the country’s southern Huila province. The Ninda-1 well, drilled by Ecopetrol to a total depth of 7,371 ft, is part of the company’s 100% owned Cuisinde contract area, awarded by the National Hydrocarbons Agency (ANH) in 2006. Preliminary tests on the Honda formation showed a flow volume of 318 bbl with a 71% watercut, yielding an average of 92 bpd of 30°API oil. The company also recently announced an agreement for eight new E&P contracts with the ANH covering 840,000 hectares in the country’s 2010 open round. |
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Gas found onshore Morocco |
Irish E&P firm Circle Oil announced a gas discovery onshore Morocco at its KSR-11 exploration well in the Rharb basin. The well tested gas at a sustained rate of 4 MMcfd on a 16/64-in. choke at a zone at about 5,800 ft with a calculated net gas pay of 38 ft. A full technical evaluation of the well results is underway, to be followed by an extended well test. Preparations are also underway for Circle’s next Moroccan drilling campaign, include the acquisition of a new 3D seismic survey. |
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| France debates shale development | A report by a French legislator urges the government to reconsider the proposed ban on shale gas development in the country. Sen. Jacques Black, in a report issued on April 13, suggested that it was legitimate to pursue resources such as shale oil and gas for the sake of France’s energy security, which depends heavily on oil supplies from Libya—currently in the midst of a civil war—and nuclear power, which carries its own risks, as demonstrated by the earthquake-damaged nuclear reactors in Japan. France has significant shale resources in the Paris basin, located in the southeast region of the country. In 2010, France had issued exploration permits to Total and US-based Schuebpach Energy, but no drilling has taken place. Vigorous opposition from the Green and Union for a Popular Movement (UMP) parties led to a suspension of shale drilling activity. A preliminary report on the economic, social and environmental issues surrounding shale gas, requested by the French government, was issued April 21. Generally, the report is in favor of exploratory research and testing moving forward under strict control and guidelines, according to the newspaper Le Figaro. The report also suggested the creation of a national scientific committee composed of energy and environmental experts to create and oversee the guidelines. |
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| Bowleven discovers more hydrocarbons offshore Cameroon | Edinburgh, UK-based Bowleven has found additional pay in a sidetrack of its Sapele discovery well in the Douala basin, offshore Cameroon. The sidetrack encountered about 75 ft of net hydrocarbon-bearing pay in the Omicron objectives. The well reached 11,923 ft TVD (14,708 ft MD), in a water depth of about 82 ft on the MLHP-5 block in the Etinde permit. Its main objective was to appraise the Deep Omicron oil discovery encountered in the Sapele-1 exploratory well and to intersect the Upper and Lower Omicron objectives. The well intersected 4.5 ft of net pay overlying 79 ft of high-quality reservoir, which has been confirmed as water bearing. In the Lower Omicron, the well intersected high-quality, thinly interbedded reservoir units with net pay of about 36 ft and average porosity of 17%. In the Deep Omicron, the sidetrack intersected a log-evaluated hydrocarbon interval of possible high-quality thinly interbedded reservoir units. | ||||
| Israel prepares for gas boom | To make full use of the nearly 26 Tcf of natural gas recently discovered off its western coast, Israel plans to double its electrical generation from gas over the next 10 years, increase industry gas use and possibly export the surplus, according to an Israeli official. Shaul Zemach, director general of the Ministry of National Infrastructures, said at OTC that the country has undertaken a major fuel-switching initiative from coal to natural gas in the two years since the discovery of the 8-Tcf Tamar field in the Mediterranean Sea. This has resulted in about 12,000 MW of currently installed electrical capacity—40% of the country’s total—coming from gas. Tamar was followed by the 1-Tcf Dalit field and the 16-Tcf Leviathan field, the biggest deepwater discovery globally in the last 10 years. Zemach said energy independence is a major driver for development of the fields, especially given political uncertainty in Egypt, Israel’s main gas supplier. | ||||
| EPA fines BP Alaska $25 million for North Slope spill | The US Environmental Protection Agency, the US Department of Justice and the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) announced that BP Alaska will pay $25 million in civil penalties and implement a systemwide pipeline integrity management program for spilling more than 5,000 bbl of crude oil from the company’s pipelines on the North Slope of Alaska. The penalty is the largest per-barrel penalty to date for an oil spill. In March 2006, BP spilled about 5,054 bbl of crude oil on the North Slope. A second, smaller spill occurred in August 2006 with about 24 bbl of crude oil spilled. Investigators from EPA and PHMSA determined that the spills were a result of the company’s failure to properly inspect and maintain the pipeline to prevent corrosion. PHMSA issued a corrective action order to BP that addressed the pipeline’s risks and ordered repair or replacement. After determining that the company had not fully complied with the terms of the corrective action, PHMSA referred the case to the Department of Justice. Of the $25 million penalty, $20.05 million will be deposited in the Oil Spill Liability Trust Fund, established by Congress in 1986 to help with oil spill cleanup costs, and the remainder will be paid to the US Treasury. |
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| Seadrill orders new ultra-deepwater drillship | Seadrill has exercised an option to build a new ultra-deepwater dual-derrick drillship at the Samsung yard in South Korea. Total project cost is estimated at $600 million. Delivery is scheduled for the third quarter of 2013. The new unit is similar to the two drillships Seadrill ordered from Samsung in November 2010 with enhanced water depth capacity and technical capabilities as well as increased accommodation capacity compared to previous-generation drillships. The dynamically positioned vessel will be capable of operations in water depths up to 12,000 ft, and have a hookload capability of 1,250 tons. The rig will also be outfitted with a seven-ram configuration of the blowout preventer stack, especially targeting operations in challenging areas such as the Gulf of Mexico, Brazil and West Africa. |
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| US gas reserves estimated at record high | Natural gas reserves in the US have been revised to 1,898 Tcf as of year-end 2010, according to an assessment of the Potential Gas Committee (PGC) of the Colorado School of Mines. This is the highest resource evaluation in the committee’s 46-year history, and exceeds the previous estimate by 61 Tcf. Most of the increase came from the reevaluation of shale gas plays. “The PGC’s year-end 2010 assessment reaffirms the committee’s conviction that abundant, recoverable natural gas resources exist within our borders, both onshore and offshore, and in all types of reservoirs—from conventional, tight and shales, to coals,” said Dr. John B. Curtis, director of the Potential Gas Agency, which provides guidance and technical assistance to the Potential Gas Committee. Curtis cautioned, however, that the current assessment does not assume either a time schedule or market price for the discovery and production of future gas supplies. The committee’s assessment includes 1,739 Tcf of gas from conventional reservoirs, tight sands and carbonates, and shales, and 159 Tcf from coalbed methane resources. Compared to the previous, year-end 2008, assessment, traditional natural gas resources increased by nearly 67 Tcf (4%), while coalbed gas resources declined by 4 Tcf (2.7%). | ||||
| BP to pay $1 billion for accelerated spill remediation | BP has signed an agreement with federal and state agencies that will accelerate work starting this year to restore areas of the Gulf of Mexico that were affected by the Deepwater Horizon accident. The agreement commits up to $1 billion to projects that will restore injured natural resources in the Gulf. It also allows projects to begin immediately, as early restoration projects, rather than waiting for the oil spill trustees to complete all of the natural resource damage assessment (NRDA) studies that are underway. The trustees are the Gulf states, the Department of the Interior and the National Oceanic and Atmospheric Administration. The Justice Department provided assistance in reaching the agreement. The projects will undergo public review before they are funded, and priority will be assigned to projects aimed at improving areas that offer the greatest benefits to wildlife, habitat and recreational use. |
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| Petrobras well strikes oil in Campos basin’s Albacora field | Brazil’s state-owned oil company announced a new oil discovery off the country’s southeastern coast. Petrobras’ well 6-AB-119D-RJS encountered a new presalt oil accumulation in Albacora field, located in the Campos basin. Preliminary volume estimates indicate an economically recoverable potential of nearly 350 million bbl of high-quality oil. Drilled in a water depth of 1,247 ft by Diamond Offshore’s Ocean Concord semisubmersible, the well reached a total depth of 15,863 ft. An oil column of 791 ft was found, of which 341 ft are from the carbonate reservoirs of the Macabu formation. Brazil’s presalt fields are estimated to hold about 80 billion boe. |
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Anadarko makes new discovery offshore Ghana |
Anadarko announced a deepwater discovery at the Teak-2 prospect, in the West Cape Three Points block offshore Ghana. Teak-2 encountered some 90 net ft of high-quality oil, condensate and natural gas pay in stacked Campanian and Turonian reservoirs. The well was drilled to a TD of 11,185 ft in water depths of about 2,900 ft. It is about 5,900 ft southwest and fault-separated from Teak-1, and about 2 mi northeast of the Mahogany-2 well. After shutting in Teak-2 for future use, the partnership plans to mobilize the rig to drill the Banda prospect, also located in the West Cape Three Points block. |
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Russia nears oil output record |
Oil production in Russia came close to a new record in March, according to official sources. Total crude output rose 0.5% to reach 10.24 million bpd. Russia is the only nation that produces more than 10 million bpd. The government targets oil production to remain above 10 million bpd for the next several years. After Russia, Saudi Arabia has the second-highest production at 8.3 million bpd. Russian gas production was down in April, falling to 67 Bcfd after reaching 70 Bcfd the previous month. Because of the drop in nuclear energy output in Japan due to the earthquake, gas imports from Russia are expected to rise throughout the remainder of the year. |
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