Daily Archives: September 7, 2011
Washington is sending the wrong message by having a delegation in Cuba review the country’s plans to drill offshore for oil and natural gas, a lawmaker said.
A delegation led by William Reilly, a top official at the National Oil Spill Commission, left Monday for Cuba to examine Havana’s oil plans.
Cuba is looking into cutting the amount of oil it imports from Venezuela through development of offshore reserves.
“By meeting with Cuban regime officials about their plans to drill for oil, U.S. officials are giving credibility to the regime’s dangerous oil-drilling scheme,” she said.
Deep-water exploration is under scrutiny following last year’s disastrous spill in the Gulf of Mexico.
Spanish energy company Repsol leads an international consortium to drill off the Cuban shore this year. The Wall Street Journal notes that if the company finds oil in Cuba‘s deep waters, it could spark a race to tap into those reserves.
By Jordi Zamora (AFP) – 9 hours ago
WASHINGTON — A group of US experts led by a former top environment official has visited Cuba to gather information on the communist country’s Gulf of Mexico oil exploration plans, according to state media.
William Reilly, who led the US Environmental Protection Agency (EPA) under former president George H.W. Bush and led a commission on the BP oil spill disaster in the Gulf until January, was reportedly leading the US delegation.
US media reported that Reilly was traveling to Cuba Monday with other experts. “The team is not traveling to Cuba in any official capacity,” a State Department official said privately.
Cuba, the Americas’ only one-party communist regime, and the United States do not have full diplomatic relations. Under an economic embargo, US oil companies are shut out of potential earnings from Cuba’s prospecting.
And US lawmakers — especially from US states on the Gulf of Mexico that took a massive economic and environmental hit from the 2010 Deepwater Horizon disaster and spill — are concerned Cuba might be unprepared or unable to take proper environmental precautions to prevent another.
A presidential commission concluded last October that a faulty cement mix in the lining of the well contributed to the BP disaster, which killed 11 workers.
Some 4.9 million barrels of oil had gushed out of the runaway underwater well — causing severe environmental damage in the Gulf of Mexico — before the leak was capped about three months later.
“We expect any company operating in Cuba?s oil and gas sector to adhere to industry environmental, health, and safety standards, and to have adequate prevention, mitigation, and remediation systems in place in the event of an incident,” the statement from the US State Department spokesman said.
Among the recommendations to the White House of the commission Reilly led were to iron out joint exploration and safety standards among Cuba, Mexico and the United States.
Reilly has convinced Mexican authorities to sign on but his earlier efforts to visit Cuba hit some State Department resistance, The New York Times reported in May.
Cuba in April announced plans to drill five deep water oil wells in the Gulf of Mexico beginning this summer, expressing confidence that its efforts will be rewarded with major new energy finds.
Manuel Marrero, an official with the government authority tasked with overseeing Cuba’s oil sector, said at the time the ventures would be undertaken with the help of unspecified foreign companies.
He said the deep water wells were to be drilled between 2011 and 2013, and would be in waters ranging in depth between 400 meters (a quarter mile) and 1,500 meters (1.6 miles).
He did not specify which countries would be among the foreign partners working with Havana on the project.
Some studies estimate Cuba has probable reserves of between five and nine billion barrels of oil in its economic zone in the Gulf of Mexico. Cuban authorities have said their crude reserves are as high as 20 billion barrels.
In 2010, Cuba produced 21 million barrels of oil, about the same as it had extracted the previous year, representing a little less than half of its annual energy needs.
Cuba has long been plagued by energy dependence, its economic Achilles’ heel. Havana used to depend on the eastern bloc for cut-rate oil and plunged into economic chaos and blackouts when it was cut off after 1989.
Now Cuba depends on Venezuela — its vital economic and political ally — for the rest of its oil imports of about 100,000 barrels per day. Any cut to Venezuelan supplies could spell political and economic disaster for Havana.
But if Cuba locks in its energy independence, it could lurch from a cash-strapped developing nation into a flush oil exporter, and potentially project its current regime years into the future.
Cuba’s economic zone in the Gulf is divided into 59 blocs. They include ventures with Repsol (Spain), Hydro (Norway), OVL (India), PDVSA (Venezuela), Petrovietnam, Petronas (Malaysia) and Sonangol (Angola). China and Venezuela have said they intend to help Cuba triple its refining capacity by 2017.
Apache Corporation said a subsidiary has received Australian government environmental approval for development of the Julimar and Brunello offshore natural gas fields that will supply natural gas to the Chevron-operated Wheatstone LNG project.
The Julimar and Brunello gas fields, discovered by Apache and Kuwait Foreign Petroleum Exploration Co. (KUFPEC) in 2007, are located offshore in exploration permit WA-356-P, approximately 180 kilometres (km) (112 miles) west-northwest of Dampier in Western Australia.
In 2009, Apache and KUFPEC joined with Chevron to develop the Wheatstone LNG hub. Apache and KUFPEC agreed to supply gas from their Julimar and Brunello fields and to become foundation equity partners in the Chevron-operated Wheatstone LNG project.
McMoRan Exploration Co. today announced results from interim logging operations at the Lafitte ultra-deep exploration well located on Eugene Island Block 223 in 140 feet of water. The Lafitte well commenced drilling on October 3, 2010 and has been drilled to 27,038 feet.
Wireline logs indicate several Lower Miocene sands below 24,300 feet that appear to be hydrocarbon bearing. The sands have various thicknesses that aggregate approximately 200 gross feet (95 feet net), some of which are contained within a thin-bedded, sand-shale formation (i.e. laminated section).
These Lower Miocene aged sands are correlative to Lower Miocene sands seen onshore and in the deepwater of the Gulf of Mexico and provide additional confirmation of McMoRan’s ultra-deep geologic model. Lafitte is McMoRan’s third ultra-deep prospect to encounter Miocene age sands below the salt weld on the Shelf of the Gulf of Mexico.
McMoRan is preparing to set casing in the Lafitte well to 27,000 feet and plans to deepen the well to a proposed total depth of 29,950 feet to evaluate deeper Miocene objectives and possibly the Oligocene section. McMoRan holds a 72.0 percent working interest and 58.3 percent net revenue interest in Lafitte. Other working interest owners in Lafitte include: EXXI (18.0%), and Moncrief Offshore LLC (10.0%).
McMoRan Exploration Co. is an independent public company engaged in the exploration, development and production of natural gas and oil in the shallow waters of the GOM Shelf and onshore in the Gulf Coast area.
By Steve Hargreaves
With job creation taking center stage in American politics, the oil industry Wednesday made a pitch for drilling more widely. With looser restrictions, the industry says it could deliver 1.4 million new jobs, boost tax rolls by $800 billion, and increase domestic energy production almost 50%.
To hit those numbers, the industry would need to drill off the East and West Coasts, in waters off Florida‘s Gulf Coast, in Alaska’s Arctic National Wildlife Refuge, and on most federal public land that’s not a national park. These areas are currently off limits to drilling, except for some public land in these regions.
In addition, the industry says it would need approval to build new pipelines to facilitate a doubling of production from Canada’s vast oil sands, a halt to the gradual tightening of rules governing shale gas development, and the preservation of favorable tax policies the industry currently enjoys.
“Poll after poll shows that job creation is the top concern of most Americans,” American Petroleum Institute President Jack Gerard said in a letter to President Obama. “We provide more than energy; we offer real-world solutions that will create jobs, strengthen our energy security and generate significant government revenue without raising taxes.”
The industry has long sought more places to drill and less regulation, and it’s hoping this latest report will find a receptive ear among lawmakers struggling with a sputtering economy.
But standing in the way is a long line of competing interests.
Those interests include Judi Whittaker, who runs a 500-cow dairy farm in upstate New York right atop the Marcellus Shale.
New York has been the scene of a bitter fight between supporters and opponents of shale gas development. The development relies on a controversial practice called hydraulic fracturing, or “fracking” for short, where vast amounts of water, sand and some chemicals are injected deep into the earth to unlock the gas.
The industry says the process is safe, but other are concerned over its effects on the water supply. New York has until recently banned the practice, but recently said it would allow it under tight new regulations.
Whittaker supports increased gas drilling on and near her farm, but she wants it done with the kind of regulations recently proposed by New York’s Department of Environmental Conservation.
“We depend on clean water for our animals to drink,” she said. “We produce milk, and it goes to the general public.”
But the industry says that to boost jobs and production, it can’t be restricted by what the report calls “unduly burdensome” shale gas regulations.
In July, the API said New York’s regulation proposal “falls short” and that a “more effective balance is necessary to be sure [the state] is not just paying lip service on an issue that could create thousands of American jobs and billions of dollars in government revenue.”
The industry will face opposition on other fronts as well.
Environmentalists have been getting themselves arrested on the White House lawn for the last several weeks, protesting the planned expansion of a pipeline from Canada’s oil sands region to the U.S. Gulf Coast.
They are concerned that extracting crude from the oil sands, which have a higher carbon content than regular oil, will exacerbate global warming.
Florida’s tourism industry, which supports nearly one million jobs in that state, also looks askew at industry attempts to drill off its coast, especially after the BP disaster last year.
“The Florida Association of Convention and Visitors Bureaus is against opening Florida waters in the Gulf of Mexico to drilling,” said Robert Skrob, the association’s director. “Employees and employers throughout Florida were negatively impacted by the Deepwater Horizon Oil Spill even though there was little direct impact to the state.”
More oil no matter what: Even if the industry doesn’t get its way, and regulations tighten and development slows, the report forecasts a growth in oil production.
Domestic oil production is expected to go from 7.8 million barrels a day in 2010 to 9 million barrels a day in 2030, according to the study, which was authored by energy consultants Wood Mackenzie. The gains are largely due to increased production from shale oil and deepwater drilling.
That’s a significant jump, but it’s not nearly the bounty predicted if the country grants the industry’s wishes.
Under that scenario, the country could be producing 15.4 million barrels of oil a day — not far from the 19 million barrels it currently consumes.
Natural gas production would rise by 30%.
It’ll be up to politicians – and ultimately voters — to decide if it’s worth it.
Chevron Corporation announced a new oil discovery at the Moccasin prospect in the deepwater U.S. Gulf of Mexico. The Keathley Canyon Block 736 Well No. 1 encountered more than 380 feet of net pay in the Lower Tertiary Wilcox Sands. The well is located approximately 216 miles off the Louisiana coast in 6,759 feet of water and was drilled to a depth of 31,545 feet.
“The Moccasin discovery underscores the importance of the deepwater Gulf of Mexico as a source of domestic energy for the United States and as a focus area for Chevron’s worldwide exploration portfolio,” said George Kirkland, vice chairman, Chevron Corporation. “Moccasin is an important addition to our queue of high-quality opportunities around the globe.”
Chevron began drilling the Moccasin well in March 2010. That activity was stopped in June 2010 when the U.S. government imposed a moratorium on deepwater drilling in the Gulf of Mexico. Drilling resumed in March 2011 after the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement approved Chevron’s revised drilling permit application.
The well results are still being evaluated, and additional work will be needed to determine the extent of the resource. Chevron, with a 43.75 percent working interest in the prospect, was the operator of the Moccasin discovery well. Other Moccasin owners are BP, with 43.75 percent, and Samson Offshore Company, with 12.5 percent.
Chevron is one of the largest leaseholders in the Gulf of Mexico and is currently developing the $7.5 billion Jack/St. Malo and the $4.1 billion Big Foot projects.
Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif.
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