Daily Archives: November 18, 2011

USA: Shell Sets World Record for Deepest Subsea O&G Well at Perdido Development

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Shell Oil Company is now producing oil from the world’s deepest subsea well at its Perdido Development, utilizing advanced technology to lead the way in increasing the company’s ability to produce more domestic oil and gas resources.

The well, at 9,627 feet below the water’s surface, is located in the Tobago Field 200 miles southwest of Houston in the ultra-deep water of the Gulf of Mexico. Tobago is jointly owned by Shell (32.5%, as operator), Chevron (57.5%), and Nexen (10.0%) and is one of three fields producing through the Perdido drilling and production platform.

Tobago breaks the world water depth record for subsea production, previously held by another field in the Perdido Development, the Silvertip field at 9,356 feet of water.

“Energy is fundamental to global economic growth. Providing this energy must be met practically, safely and in an environmentally responsible manner,” said Marvin Odum, Upstream Americas Director. “Through our highly skilled workforce and cadre of global geoscientists, Shell has applied its advanced seismic and drilling technologies at Perdido to produce additional sources of oil and gas.”

Moored in about 8,000 feet of water, the Perdido platform is jointly owned by Shell (33.34%), BP (33.33%) and Chevron (33.33%) and is the deepest drilling and production facility in the world with a capacity to handle 100,000 barrels of oil per day and 200 million standard cubic feet of gas per day. From Perdido, Shell accesses the Great White, Tobago, and Silvertip oil and gas fields through subsea wells directly below the facility and from wells up to seven miles away. At its peak, Perdido can produce enough energy to meet the needs of more than two million US households. Shell operates Perdido and its satellite fields on behalf of partners Chevron, Nexen, and BP.

This world-class project began with the 1996 lease sale when the technology to develop hydrocarbons at Perdido’s water depth did not yet exist. By the time the final investment decision for commercial development was made in October 2006, Shell had pioneered several technological firsts which allowed the company to proceed with ultra deepwater oil and gas production. Development drilling began in July 2007, five years after the discovery of hydrocarbons. Perdido produced its first oil and gas on March 31, 2010.

Perdido Technical Facts and Firsts

*Deepest water depth record for an offshore oil drilling and production platform.

*First water injection in 8,000 feet of water in the Gulf of Mexico (Great White GB001) helps push oil through the reservoir, from the injector wells to the production wells.

*First commercial production from the Lower Tertiary geological formation, which many see as the next big opportunity in deep water.

*Deployment of an innovative subsea separation and boosting system that compensates for the low-pressure reservoir and about 2,000 psi of backpressure from the wells. The system includes five specially designed 1,500-horsepower electric pumps embedded in the seafloor to boost production to the surface.

*First spar with direct vertical access wells and production hardware on the seafloor at a depth of more than 8,000 feet.

*Perdido weighs 50,000-tons and sits in water six times deeper than the height of the Empire State Building.

*The entire Perdido project has achieved 13 million man-hours without a lost-time injury, testifying to the effectiveness of the safety regimes put in place by the construction and operating teams.

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Corruption And Election Tricks Are Adding To The U.S.’ Energy Troubles

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James Taylor, Contributor

The Obama administration pulled off a rare trifecta this past week, demonstrating in three separate energy decisions how corruption and election manipulation are killing jobs and restricting the nation’s energy supply, but paying political dividends to our sitting president.

The first example of the administration putting its own political interests ahead of the interests of the nation occurred last Friday, when it announced that it would decline to make a decision on a proposed pipeline to carry oil from western Canada to refineries along the U.S. Gulf Coast. The Keystone XL pipeline would put Americans to work building the pipeline, would create additional jobs along the Gulf Coast where the oil would be refined.

Predictably, environmental activist groups argued against the pipeline, asserting that we should be weaning ourselves off of oil rather than taking steps to make it more available and affordable. They also argued that the production of this particular oil, recovered from oil sands, imposed more environmental damage than oil produced from conventional deposits. China has nevertheless made it clear that if the United States chooses not to purchase the oil, it will, so a U.S. decision not to purchase the oil will do nothing to alleviate oil sands production, even if environmental activist claims against the process are to be believed.

After reviewing the proposal for several months, the Obama administration was scheduled to announce a decision this fall. Instead, the Administration announced last Friday it would wait until after the 2012 elections to decide.

All the facts have been studied and a decision is ripe for the making. So the question is, why the delay? The reason is obvious; a decision on the pipeline might hurt the president’s reelection campaign. Approve the pipeline and anger the president’s liberal base when he most needs its support. Scuttle the pipeline and Republicans have more ammunition to support their claims that the Obama administration is restricting energy supplies and killing jobs.

A major consequence of the Administration playing political games with the timing of its pipeline decision is that Canada could well decide not to wait around indefinitely for a fickle president to determine whether his personal political career is advanced by approving the pipeline. China will take the oil today and will be more than happy to sign a long-term contract for it. Friendship aside, the smart economic move is to secure a buyer when one can, and friendship only goes so far when billions of dollars of sales are at stake – especially when friendship appears to be only a one-way street right now as Obama unnecessarily leaves the Canadians hanging.

Moreover, the president’s political gamesmanship is keeping domestic oil prices high, and killing jobs. Even if the president announces a year from now that he will approve the pipeline (and even if the Canadians are still waiting around for our decision a year from now), the president will have needlessly prolonged unemployment. If approving the pipeline is the right thing to do, there is no reason other than political self-interest not to give the approval now.

The second example of the Obama administration putting its own political interests ahead of the interests of the nation came to light yesterday, when it was revealed that the Administration pressured Solyndra executives to delay layoffs that were planned for October 2010 until after the November 2010 midterm elections.

Solyndra was preparing to make necessary job cuts in light of its difficulty generating revenue. Rather than allow the company to immediately make a decision that would maximize its chances to eventually balance its books, Obama administration officials used their leverage to push Solyndra to delay necessary cost-saving measures. Delaying necessary cost-saving measures would harm the financial viability of the taxpayer supported company but would avoid an embarrassing news story for the president and his political allies on the eve of an election.

Solyndra indeed held off announcing its job cuts. On the morning after the 2010 midterm elections, Solyndra announced it would lay off 190 workers and close one of its factories. The Obama Energy Department rewarded it by thereafter giving the floundering company millions more taxpayer dollars even though its ultimate fate was by then readily apparent.

Again, as was the case with the Administration’s Keystone XL pipeline decision, the only reason for it to delay was for the president to gain a transitory political advantage. If layoffs needed to be made and a factory needed to be closed to improve the prospects of Solyndra’s survival, delaying such necessary action merely placed the company further at risk of going bankrupt. Despite the fact that these were taxpayer dollars with which the Obama administration was playing politics, it indeed chose to pressure Solyndra to delay implementing action that would have improved the chances of its survival.

Solyndra gave in to the Administration’s pressure and predictably went bankrupt soon thereafter. Solyndra executives will be bailed out in bankruptcy court (especially with taxpayer funded federal loan guarantees backing them up) and the Administration successfully avoided an embarrassing news story on the eve of the 2010 midterm elections. The only losers were the remaining 300 million Americans left on the financial hook for such corrupt political gamesmanship.

The third example of the Obama administration putting its own political interests ahead of the interests of the nation also came to light this week with advance excerpts of a book written by Peter Schweizer exposing how the Administration is abusing federal energy loan programs to pay off political donors. According to Schweizer, over 80 percent of the billions of dollars distributed under the federal stimulus 1705 Loan Program “went to companies either run by or primarily owned by Obama financial backers—individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party. The grant and guaranteed-loan recipients were early backers of Obama before he ran for president, people who continued to give to his campaigns and exclusively to the Democratic Party in the years leading up to 2008.”

“Indeed, at least 10 members of Obama’s finance committee and more than a dozen of his campaign bundlers were big winners in getting your money,” Schweizer added. “At the same time, several politicians who supported Obama managed to strike gold by launching alternative-energy companies and obtaining grants.”

Under normal circumstances there would be a hefty political price to pay for deliberately obstructing an economically necessary pipeline merely for personal political gain, pressuring a company to make financial decisions that make the company more likely to take hundreds of millions of taxpayer dollars with it into bankruptcy, and using federal stimulus dollars to pay off political donors rather than maximize job creation. But government interfering with energy markets is now the rule rather than the exception, and where there is excess government power there is invariably government corruption. As our nation suffers an unnecessary and self-inflicted energy crisis, government corruption of the energy market has apparently become the “new normal.”

James M. Taylor is senior fellow for environment policy at The Heartland Institute and managing editor of Environment & Climate News.

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On Energy Production, U.S. Isn’t Keeping up with the Joneses

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America has an abundance of natural resources, yet our policies keep them locked up. We can’t drill in the Gulf. ANWAR is off limits. Mining is nearly impossible due to regulations. “Endangered species” threaten existing supplies.

Meanwhile resource discoveries are being made and developed the world over.

Last week, Repsol announced a new discovery in Argentina—estimated to be more than 900 million barrels of oil. The oil shale find is reported to be Repsol’s largest ever. Argentina’s potential has attracted investment from both majors and independents. Argentina’s rising energy consumption and higher prices make Repsol’s success especially welcome, representing a potential windfall for the country. Argentina is not crying.

On October 20, a “giant” gas discovery was announced off the coast of Mozambique. It is reported that the results of the exploration well “exceed pre-drill expectations and confirm the Rovuma Basin as a world-class natural gas province.” Then, one week later, word came out that the find was 50% greater than originally estimated with up to 22.5 trillion cubic feet of gas. Estimates are expected to increase. Infrastructure, including LNG facilities, will have to be built to support the recent exploration successes with the natural gas expected to be brought to the market in 2018.

The day before the original Mozambique “giant” discovery announcement, it was reported that companies such as ExxonMobil would invest $100 billion to develop and upgrade oil fields in Iraq. The investment is expected to up Iraq’s oil production to at least 6.8 million barrels of oil a day by 2017—making Iraq one of the world’s largest producers of crude oil.

Also, on October 19, reports came out saying that the North Sea Statoil discovery is bigger than originally estimated with a potential of 2.6 billion barrels of oil equivalent—which would make it the third-largest find ever made on the Norwegian shelf. Production is expected to begin by 2018.

One day earlier, October 18, service provider Odebrecht announced plans to triple its revenues over the next three years. In support of Brazil’s vast deepwater oilfields, the company is spending $5 billion in equipment, from drilling ships and floating oil platforms to pipeline-laying vessels. Odebrecht says: “This year we should [have] revenues of about $500 million and we are going to double that next year, and be at $1.5 billion by 2013.”

This, all in the past couple of weeks.

In late-December 2010, 16 trillion cubic feet of gas was found off the cost of Israel in what is being called the Leviathan Field. The Julia Field was discovered in 2008 in the Gulf of Mexico and is called one of the greatest discoveries of the Gulf with an estimated 1 billion barrels of oil—but the Interior Department is now fighting ExxonMobil over its control.

Clearly there is no energy shortage.

While Europe is not rich in energy resources, they do understand their importance. They know they need energy.

Last week, on November 8, the Nord Stream Pipeline opened and began delivering Russian gas to Germany. With proposed plans to close their nuclear power plants by 2022, Germany needs the resource from Russia—though it does raise the specter of dependence on Russia/Russian energy control. Work is underway to build pipelines from other sources, which will minimize Russian domination.

Two days later, on November 10, President Obama announced a delay of more than a year to the true-shovel-ready XL Pipeline that would have created thousands of industry-funded jobs and reduced America’s dependence on Middle Eastern oil. The pipeline would have brought both Canadian and northern US oil to refineries in the southern United States. Instead of diversifying our energy supplies and suppliers, we remain reliant on unfriendly countries.

Some might point to the November 8 announcement of a “modest expansion” in offshore leasing to indicate a change in the Obama administration’s attitude—though, in light of his ideological opposition to oil, gas, and coal, the proposed plan is more likely the result of public and industry pressure and the upcoming presidential election. Much like the apparent reverse on the ozone regulations left plenty of onerous, price-elevating regulations in place, this modest expansion still keeps many of America’s most promising energy resources—some the most promising in the world—off limits.

Worldwide, more and more energy resources are being discovered, developed, and delivered. In the United States, not so much. Like public and industry pressure pushed for an increase in offshore leasing and a decrease in the EPA’s economically destructive regulations, we need to keep the pressure on and engage friends, family, and neighbors to do the same. Congress needs to hear from you. We need to be exploring and discovering here.

Marita Noon is the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy. Marita’s twentieth book, Energy Freedom, has just been released.

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USA: Sempra to Pursue Tolling Fee for Cameron LNG Export Scheme

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Sempra LNG will underpin its 12 million tonnes per annum (mtpa) liquefaction plans for its US Cameron LNG plant with a tolling fee rather than taking title of the natural gas and then offering it to sellers at the facility on a free on board (FOB) basis, a company executive said on Thursday.

We are settled on the tolling structure and do not envisage changing it down the line,” Octavio Simoes, Sempra’s vice president of commercial development, said.

It’s more attractive as it doesn’t give us volume or price risk exposure to the US market,” he told ICIS Heren on the sidelines of the World LNG Summit in Rome.

Sempra Energy became the sixth US company, and the fourth in the US Gulf region, to declare its formal intentions to export US natural gas as LNG, having filed a request with US regulators on 10 November.

In the request, the California-based company asked the US Department of Energy (DOE) for consent to send up to 1.7 billion cubic feet (bcf)/day to free-trade-friendly countries for 20 years from the Hackberry, Louisiana, plant.

Sempra said the document was the first in a two-part process, with a request to export to non-free-trade nations to follow.

The subsequent application to export domestic LNG to non-FTA countries will require an analysis of the public interest, and Cameron LNG will provide additional evidence regarding the public interest as part of that application,” Sempra said in the filing.

Sempra’s export intentions bring the total amount of conceived large-scale natural-gas liquefaction in the lower 48 US states to more than 67mtpa.

The DOE said during a recent US Senate hearing that it would be conducting a pair of studies to deepen its understanding of the market impacts that could come with a large-scale push towards exporting US natural gas as LNG.

The government agency will not approve a non-free-trade agreement request until the studies are concluded, possibly in the first quarter of next year.

Exports not only option

But the Sempra executive said the company could feasibly sell some LNG from Cameron to the developing LNG transport market in the US rather than committing all of the volumes for export.

Building a liquefaction facility in the US does not necessarily mean that you are committed to exports,” Simoes said. “There is a great arbitrage opportunity offered by the difference in LNG prices and diesel prices in the US.”

Sempra CEO Debra Reed said during a quarterly earnings call on 4 November that the company had received strong interest from “large, credit-worthy counterparties” seeking liquefaction services from Cameron LNG on a long-term contract basis.

Sempra said long-term export authorisation is needed before it can finalise commercial agreements, which will be 20-year deals run in conjunction with the export license.

(icis)

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Scientists Find Parts of Megacontinent Gondwana in International Waters West of Australia

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Australian scientists exploring areas of the Indian Ocean said Thursday they had found sunken parts of the megacontinent Gondwana which could offer clues on how the current world was formed.

The two “islands” were found on the remote sea floor in international waters 1,600 kilometres (1,000 miles) west of Australia during a surveying trip last month.

Their rocks contained fossils of creatures found in shallow waters, meaning they were once part of the continent at or above sea level rather than created by undersea volcanic activity, said Sydney University geophysicist Jo Whittaker.

She called it an exciting discovery which would hopefully shed light on how Gondwana broke into present-day Australia, Antarctica and India between 80 and 130 million years ago.

Whittaker, one of the key researchers, said she was particularly interested in exploring India’s drift first northwest and then sharply north, where its northeast coast, once joined to Australia, smashed into Eurasia, forming the Himalayas.

We have a fairly good idea where those continents were but we don’t exactly know, the eastern Indian Ocean is one of the more poorly explored parts of the world’s oceans in terms of tectonics,” she told AFP.

So it will help us figure out the plate kinematic motions that led to India moving away from Australia and heading up off to crash into Eurasia.”

Samples of sandstone and granite dredged from a steep cliff on one of the islands, about 2,000 metres (6,600 feet) below the ocean surface, are to be dated but the research team believe they are up to one billion years old.

The rocks will also be compared with samples from Australia’s west coast to try to determine where exactly the islands broke away from.

Similar matching was not possible with India because the relevant coast was now “smashed into the Himalayas somewhere,” said Whittaker.

India’s east coast was once adjacent to what is now modern-day Antarctica.

She likened the continental separation to pulling something “a bit gooey” apart and said the fragments, which are a fraction of the thickness of normal continental crust and combined about the size of Scotland, were the “little pieces that got left behind.”

These pieces are probably not as thick as (continental crust) so they sit a little bit lower in the water, like something floating in the bath essentially,” she said.

Whittaker added that the fossil find was extremely lucky given the vastness of the area they were dredging.

We’re excited to actually get some really good samples and very clear cut continental rocks which show that (the islands) are little fragments of Gondwana that were left behind as India moved away from Australia,” she said.

Plate tectonic theory is a relatively young science which was only recognised in the 1950s and experts were still trying to establish what made the continents move and change direction, she added.

Australia was moving northwards at a speed of about seven centimetres (2.75 inches) a year, likely due to a subduction zone along the Indonesian coastline where two plates met that was linked to the destructive 2004 earthquake and tsunami.

Antarctica, on the other hand, was not moving at all and Whittaker said discoveries like the Gondwana islands were critical.

It’s very significant, it’s not every day you discover two large continental fragments on the ocean floor,” she said.

Together with some of the other data this has the potential to change how we’ve been modelling that part of the world and that timeframe.

(terradaily)

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USA: Cape Wind Opponents Get Lot of Donations

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Cape Wind’s main opposition group said contributions to its cause surged by 22 percent last year as its donor base broadened amid rising concerns about the offshore energy project’s cost.

The Alliance to Protect Nantucket Sound raised $1.8 million in 2010, up from $1.4 million in 2009, according to the nonprofit’s federal tax return. Emboldened by a recent court victory and rejection of U.S. loan backing for the 130-turbine project, the group said it’s on track for another fundraising gain in 2011.

“We’re definitely seeing a resurgence of support. We’re definitely on the upswing,” said Audra Parker, the Alliance’s CEO. “The better people feel about our momentum, the better our fundraising will do.”

The Hyannis-based group is trying to keep up with skyrocketing legal bills — $1.3 million last year compared to $500,000 in 2009 — through a series of direct mailings to its 5,000-strong donor base and summertime cocktail receptions catering to deep-pocketed supporters on the Cape and Islands. Money has also flowed in via Facebook and Twitter.

“The legal expenses have been huge,” said Parker, a Barnstable resident who joined the group in 2003 and became CEO in 2009. “We’ve shifted phases from more of a regulatory process to court cases.”

The Alliance’s donations fell by half in 2009 to the lowest level since the group started in 2002. But the cash comeback started after details about Cape Wind’s cost to ratepayers — an estimated $2.7 billion over 15 years — emerged when state utility regulators approved the project in November 2010.

“That really changed the playing field, where it was once a Cape and Islands issue … and now it’s become really a statewide issue,” Parker said. “We definitely have more donations coming in … from off-Cape and from individuals who are very upset about the high cost of power.”

By Greg Turner (bostonherald)

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Dutch Fairmount Escorts Scarabeo 9 Rig around the Cape of Good Hope, South Africa

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Fairmount Marine, a Dutch marine contractor for ocean towage and heavy lift transportation, announces that its powerful tug Fairmount Glacier has successfully assisted the new build semi submergible drilling rig Scarbeo 9 sailing around Cape of Good Hope.

For this operation Fairmount was contracted by Saipem Energies directly after the successful installation of  the Usan FPSO Unit offshore Nigeria.

Fairmount Glacier was contracted to sail towards a meeting point offshore South Africa where she met with Scarabeo 9 and escorted her safely around the Cape of Good Hope. Despite the bad weather encountered during the route, the  convoy proceeded at an average speed of 4.5 to 5.0 knots.

The semi submersible drilling rig Scarabeo 9 has a length of 115 metres, is 80 metres wide and her depth – from keel to main deck – is 35 metres. After they had safely cleared the South African Coast, the Master of Scarabeo 9 thanked Fairmount  Glacier for her continued support throughout the voyage. The Fairmount Glacier returned to Cape Town.

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