Drilling advances
Helicopter tragedy in US Gulf. Our sympathies go out to the families of 10 people killed in the recent crash of the Sikorsky 76 helicopter in the Gulf of Mexico, 90 miles off Galveston, Texas. The helicopter, owned by Rowan Co. subsidiary ERA Aviation, with two crew members and eight passengers, departed Scholes field in Galveston at 6:45 p.m., March 23, and was last heard from 27 min. later. Rowan is obviously devastated by this tragic accident, the cause of which has not yet been defined. It was to rendezvous with Transocean's Discover Spirit drillship about 130 mi. east of South Padre Island, Texas. The rig was on its way to drill Unocal's Tobago prospect in Alaminos Canyon Block 859, 200 mi south of Galveston. Eight of the bodies were recovered from the wreckage within two days, the remaining two about a week later. The passengers included four Halliburton employees, one from Drill-Quip and two from Offshore Energy Services, all contracted to Unocal, plus one Unocal employee. At press time, the National Transportation Safety Board was assessing possible crash causes, with input from analysis of the cockpit voice recorder. Precision Drilling's land rig purchase. Worldwide oil/gas drilling contractors GlobalSantaFe Corp. (GSF) and Precision Drilling Corp. announced execution of a definitive agreement for Precision to buy all of GSF's worldwide land drilling assets for US$316.5 million in an all-cash transaction, which is expected to be completed before mid-year. The sale includes 31 land rigs located in the Middle East, North Africa and South America, and a fleet of specialized rig transport equipment that supports land rig operations in Kuwait and the Kuwaiti-Saudi Arabia Partitioned Neutral Zone. GSF said that, while it has been successful with the land rig business, it has become an increasingly smaller part of its overall operations. And this transaction will permit it to focus its management efforts on growing the offshore market. With Precision's reputation for quality operations, and with the majority of its employees associated with these operations offered continuous employment with Precision, it is confident the customers will continue to receive an excellent level of service. Precision said, "The transaction provides a tremendous opportunity to expand our growing international presence. The excellent quality of both the rigs we are acquiring and the people associated with GSF's land drilling operations will strengthen our product offerings." Western US Gulf Lease Sale 192. The Minerals Management Service (MMS) announced in the Federal Register availability of the proposed notice of Sale 192, an offshore oil/gas lease sale in the Western Gulf of Mexico, scheduled for August 18, 2004. The proposed sale encompasses about 3,890 unleased blocks, covering some 21.1 million acres in the Western Gulf OCS planning area offshore Texas and in deeper waters offshore Louisiana. The blocks are located 5 km to 357 km offshore, in water depths ranging from 8 m to 3,100 m. MMS estimates the proposed sale could result in the production of 136 MMbo to 262 MMbo and 0.81 Tcf to 1.44 Tcf gas. Provisions proposed in the sale include the following: 1) MMS would offer a royalty relief incentive for shallow-water, deep-gas production from leases issued from Sale 192; 2) MMS proposes to offer Mustang Island Blocks 793, 799 and 816, which were deferred from recent sales; and 3) a minimum bonus bid has been raised to $37.50 per acre from $25 per acre for deepwater tracts in water depths of 400 m to 799 m. Other provisions, further details and information on an available Environmental Assessment that MMS has prepared for Sale 192 are posted on the MMS Website: www.gomr.mms.gov. Oil supply limitations drive price increases. The world is drawing down its oil reserves faster than ever and is facing a future of oil price increases that will occur sooner than many believe. These are among the conclusions of the 3rd edition of "The World Oil Supply Report 2004-2050," the study published recently by energy analysts Douglas-Westwood. According to the study's author, Dr. Michael R. Smith, three fundamentals are strongly evident: increasing oil demand, reducing reserves and a decline in discovery rates. Some key factors detailed in the study are summarized here. Global oil demand grew by a dramatic 2.6% in 2003, with the greatest increase from China led by a surge in power generation and a 75% jump in vehicle sales. The world is drawing down its oil reserves at an unprecedented rate. Although 99 countries have or can produce significant oil, 52, including the US, are already well past peak, while another 16 are at peak or will reach it soon. Predictions of a "glut" of oil through 2003/2004 failed to materialize. Not only have projects been delayed, but opportunities are receding rapidly for significantly increasing output outside of deep waters or OPEC countries. Thus the world's known and estimated yet-to-find reserves and resources cannot satisfy even the present level of production beyond 2020. Ultimately oil companies and countries alike must cope with declining production and locate and compete for new energy supplies by diversifying, increasing imports and/or developing indigenous alternatives, says Dr. Smith. For further information, contact John Westwood at: john@dw-1.com. Safety in Seas award. Tidewater Inc. was awarded the 2004 National Ocean Industries Association (NOIA) Safety in Seas Award, recognizing its outstanding contribution to the improvement of safe operating procedures in the ocean industries. Tidewater's award-winning nomination was selected by a blue-ribbon panel of judges from the US Coast Guard, the Minerals Management Service and the National Academy of Sciences' Marine Board. The judges awarded this prestigious honor in recognition of the company's dramatic overall improvement of the corporate safety culture and uniform implementation of stringent safety standards. Acknowledging the significant contributions made by modern-day pioneers in their pursuit of the ocean frontier, Compass Publications, Inc., publishers of Sea Technology magazine, established the NOIA Safety in Seas Award in 1978. The award, now in its 27th year, continues to serve as a testimony to the high standards associated with the rapid growth of the ocean industries.
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