Daily Archives: September 11, 2011
BP announced today the drilling of a successful appraisal well in a previously untested northern segment of the Mad Dog field in the US Gulf of Mexico. The well results confirm a significant resource extension for the Mad Dog Field complex, which includes the existing field, in production since 2005, and appraisal drilling of the Mad Dog South field in 2008 and 2009.
Pending confirmation through future appraisal drilling, the total hydrocarbons initially in place in the Mad Dog field complex are now estimated to be up to four billion barrels of oil equivalent.
The well, drilled by BHP Billiton on behalf of the unit operator BP, is located on Gulf of Mexico Green Canyon block 738 approximately 140 miles (225 kilometres) south of Grand Isle, LA., in about 4,500 feet (1,371 metres) of water. The well encountered about 166 net feet (50 metres) of hydrocarbons in the objective Miocene hydrocarbon-bearing sands and discovered an oil column of more than 300 feet (91 metres).
“With these additional hydrocarbon resources north of the main field, Mad Dog has been firmly established as a giant field in BP’s Gulf of Mexico portfolio, rivalling Thunder Horse in size of resource,” said Bob Dudley, BP group chief executive. “Working with the industry and regulators, we will apply our enhanced standards of safety, reliability and compliance to all of our Gulf activities as we continue to provide important jobs and energy to the nation.”
BP maintains a 60.5 per cent working interest in Mad Dog. BHP Billiton has a 23.9 per cent interest, Chevron Corporation, through its subsidiary Union Oil Company of California, has a 15.6 per cent interest.
Due to the materiality of the Mad Dog South finds in 2009, BP has been advancing development options to increase production from Mad Dog by adding another spar production facility with a production capacity of 120,000–140,000 barrels of oil equivalent per day (boed).
“Coupled with the recent exploration success at the discovery at the Moccasin prospect, located in Keathley Canyon, the Mad Dog result re-emphasizes the exploration and development potential of the Gulf of Mexico and the region’s ability to continue to deliver material projects for BP,” Dudley added.
On Sept. 6, 2011 Chevron Corporation announced the Moccasin discovery in the Lower Tertiary play on Keathley Canyon block 736. BP has a 43.75 per cent working interest in the Moccasin prospect. The prospect is operated by Chevron U.S.A. Inc., also with a 43.75 per cent interest, and the co-owner is Samson Offshore Company with 12.5 per cent interest.
The Mad Dog Field started production in 2005 and utilizes a truss spar platform, equipped with facilities for simultaneous production and drilling operations. The facility is designed to process 80,000 barrels/day of oil and 60,000 standard cubic feet/day of gas.
Oil and gas is transported to existing shelf and onshore interconnections via the Mardi Gras Transportation System.
BP is one of the largest producers of oil and gas in the US Gulf of Mexico with net production of over 250,000 boed. BP is progressing eleven Gulf of Mexico projects: Atlantis Phases 2 and 3, Kaskida, Mars B, Galapagos, Na Kika Phases 3 and 4, Freedom, Mad Dog Phase 2, Mad Dog North and Tiber.
Major BP developments in the deepwater Gulf of Mexico include: Pompano, 1994; Marlin, 2000; Horn Mountain, 2002; Na Kika, 2003; Holstein, 2004; Mad Dog, 2005, Atlantis, 2007, Thunder Horse 2008.
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Alex Mills Posted September 11, 2011 at 12:19 a.m.
President Obama’s opinions about the petroleum industry aren’t very nice. He would like for it to vanish overnight to be replaced by wind, solar and other forms of “clean” energy.
The President, being the intelligent man that he is, knows that wishing won’t make it happen. He knows that his beloved “renewables” can’t compete in today’s economy even at $100 oil.
The President does have tremendous powers at his disposal, and that is the power of the federal bureaucracy. What he cannot impose on industry through the legislative process, he tries it through the bureaucratic process.
One of the first things Obama did as President was proposed to increase taxes on the U.S. oil and gas industry. He sent Secretary of Treasury Timothy Geithner to Congress to testify that percentage depletion and expensing of intangible drilling costs distorted crude oil and natural gas markets by creating and oversupply of energy.
With that kind of logic there is no wonder that the nation’s economy is in crisis.
Repealing tax provisions as outlined in President Obama’s budgets of 2010, 2011 and 2012 will discourage drilling and production, increase oil imports, put more pressure on increasing petroleum costs, and hinder job growth in the U.S.
Increasing taxes during a recession is ill advised, especially on one of the few industries that has experienced job growth. The number of Texans on oil and gas industry payrolls totaled an estimated 230,400, about 33,100 (16.8 percent) more than in July 2010, according to the Texas Workforce Commission. The number of upstream oil and gas workers in Texas peaked in October 2008 at an estimated 223,200, following a revision to reflect new industry employment data for 2009 and 2010.
Obama’s bureaucracy powers only begin with the Treasury Department. His Interior Department has slowed down to a crawl the approval of permits to drill on federal onshore and offshore leases. The stories of the feds dragging their feet in the Gulf of Mexico is well documented, but the same holds true for many permits onshore out west.
And, Obama’s Environmental Protection Agency (EPA) has tried to kill the oil and gas industry through a myriad new interpretations of old laws that would make it virtually impossible for the industry to get in compliance at almost any cost.
One of the most onerous new requirement comes from EPA’s proposed greenhouse gas (GHG) permitting program for utilities and refineries in Texas only. EPA’s unprecedented action comes after 18 years of successful regulation by the Texas Commission on Environmental Quality (TCEQ). Texas’ air permitting program has successfully reduced harmful emissions in the state at a higher rate than most other states. Emissions data cited by the Governor’s Office indicates that the Texas clean air program achieved a 22 percent reduction in ozone and a 46 percent reduction in nitrous oxide, which outpaces the 8 percent and 27 percent recorded nationally.
It is estimated that 167 plants will be affected. Will power plants and refineries close if they are unable to obtain a federal permit? If closed, how will oil and gas producers be able to get the products to a market? Will shortages of refined product and electricity occur? What impact will the shortages have on price, jobs and the economy? What changes will the regulations have on domestic production and oil and gas imports?
Additionally, EPA and the Department of Energy are conducting their own studies of hydraulic fracturing, which has been regulated by the states for more than 50 years.
The Commodities Futures Trading Commission, the Federal Energy Regulatory Commission and the Federal Trade Commission are all examining and regulating the trading of crude oil and natural gas on the commodities markets.
And, just recently the Securities and Exchange Commission announced that it will begin an investigation of oil and gas companies to make certain that potential investors are sufficiently notified of the possible liabilities associated with hydraulic fracturing.
That’s a lot of bureaucrats looking over your shoulder.
Despite all of the regulatory morass, the industry continues to push forward. Just imagine what could happen if the federal government became a friendly partner instead of an adversary.
- Louisiana Remains on the Receiving End of Washington D.C.’s Worst Regulations (mb50.wordpress.com)
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- MARK TAPSCOTT: The Obama Energy Crisis As You’ve Never Before Seen It. “It’s been eclipsed somewha… (pajamasmedia.com)
- An EPA Moratorium (mb50.wordpress.com)
- Obama’s Real Energy Policy (mb50.wordpress.com)