Daily Archives: December 7, 2011

Bully I Makes Debut in GOM


by  Noble Corp. & Shell

Shell and Noble Corp. announced the Gulf of Mexico arrival of the Noble Bully I, a state-of-the-art offshore drilling rig that is designed to raise the bar in terms of safety and performance. The Noble Bully I (UDW Drillship) is the first of two Bully rigs, jointly designed by Shell and Noble, and can be equipped to drill in up to 10,000-feet of water.

The Bully rigs also feature a compact box-type drilling tower, known as a Multi-purpose Tower, instead of a conventional derrick. As the name indicates, a Multi-purpose Tower is designed to maximize productivity and safety, yet it allows for a significantly smaller vessel when compared to other deep water drill ships of similar capacity.

The ships also feature an attention to energy efficiency, use less fuel and are shorter and lighter than comparable drill ships. The Noble Bully I and Noble Bully II (UDW drillship), are dynamically positioned drill ships and can, therefore, be positioned at a favorable angle toward wind, waves, and currents, and feature ice-class hulls. Shell and Noble have increased the automated technology on the Bully rigs, increasing personnel safety on board.

The Noble Bully I has now arrived in the Gulf of Mexico from Singapore and will complete commissioning and acceptance testing this month before beginning operations. The Noble Bully I will first drill in Shell’s Mars B, Olympus, development while the Noble Bully II drill ship is expected to begin operations early next year in Brazil.

Source – RIGZONE

Sinopec: China Will Pass US as Shale Gas Leader


The Chairman of China Petroleum & Chemical Corp (Sinopec), say that China’s shale gas revolution will exceed that of the United States in five to 10 years.

“I think the total reserves are even more than the U.S. so production is not less than the U.S., but it is a matter of timing,” Fu Chengyu said speaking at the World Petroleum Congress being held in Doha.

State controlled Sinopec is China’s second-largest oil company.

Related Reading: Shell Finds Shale Gas in China


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BP, Shell preparing for resuming oil exploration in Libya


A Libyan man works at a refinery inside the Brega oil complex on Saturday Feb. 26, 2011. (AP Photo/Hussein Malla)

Posted on December 7, 2011 at 6:52 am by Bloomberg

BP Plc and Royal Dutch Shell Plc (RDSA), Europe’s biggest oil companies, aim to resume exploration in Libya, whose new government seeks to stabilize relations with foreign companies following the ouster of Muammar Qaddafi.

BP Chief Executive Officer Robert Dudley and Shell CEO Peter Voser said yesterday in Doha, Qatar, they’re evaluating resumption of drilling at wells begun before hostilities broke out at the start of this year. Companies that were already producing in the North African state, such as ConocoPhillips, Repsol YPF SA and Eni SpA, are poised to boost output.

Libya, the holder of Africa’s biggest oil reserves, is restoring production after output dropped to 45,000 barrels a day, from 1.6 million barrels, after a rebellion against Qaddafi broke out in February. The loss of Libyan exports contributed to a 20 percent increase in London oil prices earlier this year.

“There is a real interest that we can deploy technology and our people and raise production,” ConocoPhillips CEO James J. Mulva said in an interview, referring to the transitional government’s plan to bring oil companies back to Libya. “We feel we can restore production and hopefully this gives us the opportunity to do even more.”

Production Recovery

International oil companies need access to new crude and natural gas deposits to meet global demand, which is expected to grow over the next two decades, according to Dudley, Voser and Exxon Mobil Corp. (XOM) CEO Rex Tillerson. The three executives were in Doha this week for the World Petroleum Congress.

Repsol, Spain’s biggest oil company, is raising output and is now pumping 200,000 barrels a day in Libya, CEO Antonio Brufau Niubo told reporters. It has a production capacity of 340,000 barrels a day, he said.

Eni expects to raise Libyan output to pre-crisis levels of 280,000 barrels a day by June 2012 and is targeting production of 300,000 barrels a day in 2013, the Italian company’s Head of Exploration and Production Claudio Descalzi said last month.

Libya’s crude output had recovered to 840,000 barrels a day by the end of last month, the state-run National Oil Corp said Nov. 30. Production may increase to 1.3 million by June, former Oil Minister Ali Tarhouni said Nov. 25, less than a week after stepping down from the interim cabinet.

New Wells

OPEC Secretary General Abdalla el-Badri said Dec. 4 he expected Libya to be pumping about 950,000 barrels of oil a day by the end of this month, rising to 1.3 million barrels a day in the first quarter and to 1.5 million in the second quarter. Iran’s Oil Minister Rostam Qasemi said Dec. 5 it would take about a year for Libya to return to full production.

BP, which signed an exploration agreement with Libya in May 2007, stopped exploration in February when the revolt broke out. The company was “on the verge” of starting to drill two onshore and offshore wells in Libya, and has now been asked by the government to return to the country, Dudley said.

“We will make a decision when it’s the right time to ensure the safety of our employees,” he said.

Shell had been drilling two wells in Libya before the unrest and was considering a restart, according to Voser.

ConocoPhillips (COP) and its partners had been producing about 350,000 barrels a day from Libya’s Waha field before violence against the Qaddafi regime broke out, CEO Mulva said. The company’s share of production was 50,000 barrels a day.

Libyan authorities have “indicated that they are going to honor the contracts” that oil companies had with the previous regime, Mulva said.

International Sanctions

Total SA (FP) is in discussions with the new Libyan government to drill wells offshore there, said Stephane Michele, the company’s director of exploration and production for Qatar. The French company had drilled two exploration wells before unrest started and aims to resume its offshore exploration program there, Michele said in an interview yesterday.

Libyan oil output, which rose as high as 3.4 million barrels a day in the early 1970s, stagnated in the 1980s and 1990s as international companies pulled out and the country was subjected to sanctions. Production remained at 1 million to 2 million barrels a day, according to BP Plc (BP/) statistics compiled by Bloomberg.

A turnaround in its relations with the west came between 2002 and 2005 when Qaddafi abandoned a nuclear-arms development effort, pledged to destroy a chemical weapons stockpile and renounced terrorism. The move led to an easing of sanctions and improved ties with the U.S. and European nations.

Libya attracted investment from international oil companies including Eni, BP, ConocoPhillips, Total and Repsol as the country sought to raise production capacity to 3 million barrels a day. In 2009, Libya approved a 12.1 billion-dinar ($9.8 billion) plan to develop and upgrade 24 oil fields.


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The Report the White House Doesn’t Want You To Read


WASHINGTON D.C. — The Institute for Energy Research released today a groundbreaking North American Energy Inventory exposing the decades-long myth that the U.S. is running out of coal, oil, and natural gas because of inadequate domestic supplies. As a part of IER’s year long “Energy for America” campaign, the report details the vast energy resources that could power the nation’s future, if not for government policy that stands in the way.

“The current administration and its green energy allies in business and in Washington appear willing to drive up the price of energy for American consumers by limiting access to our vast resources. For the past several years, taxpayer dollars have been spent to fund unproven green energy pipe dreams, while Americans have been denied the opportunity to utilize the coal, oil, and natural gas that is literally under our feet,” said IER President Tom Pyle about the report.

“This energy report should change the conversation in Washington and promote policies that reproduce nationwide the energy boom in places like North Dakota, where unemployment is at now at 3.5 percent (the lowest in the nation) and domestic production on private lands has more than tripled in the last five years. The Institute for Energy Research is proud to release this report, the culmination of months of research and analysis by IER experts. We have drawn from a broad array of government, industry, and university data to present hard facts — not myths — about our energy future. The report presents a clearer picture than the anti-fracking, anti-drilling, and anti-exploring ideologues in Washington want the American people to see.”

Among the report’s findings are:

  • When combined with resources from Canada and Mexico, the total recoverable oil in North America exceeds 1.7 trillion barrels. That’s more than the entire world has used in 150 years, and sufficient to fuel the present needs in the United States for the next 250 years.
  • In the last 30 years, the United States produced 77 billion barrels of oil, which was more than 150 percent of the estimated reserves in 1980.
  • The total amount of recoverable natural gas in North America is approximately 4.2 quadrillion (4,244 trillion) cubic feet. That is enough natural gas in North America to last for the next 175 years at current rates of consumption.
  • There is more recoverable natural gas in North America, Canada, and Mexico than the combined proved reserves in Russia, Iran, Qatar, Saudi Arabia, and Turkmenistan.
  • North America has more than 497 billion short tons of recoverable coal, or nearly three times as much as Russia, which has the world’s second largest reserves. In fact, North America’s recoverable coal resources are bigger than the five largest non-North American countries’ reserves combined (Russia, China, Australia, India, Ukraine.)
  • A scarcity of good policies, not a scarcity of energy, is responsible for U.S. energy insecurity.

IER will preview the report during a weekly briefing at The Heritage Foundation in Washington D.C. at 12:00 noon on Tuesday, December 6, 2011.

To read the full report and supplemental materials, click here.

To watch a video presentation of the report’s central findings, click here.


UK: Tidal Energy, Possible Answer for Renewable Industry


THE latest bid to revive plans for a Severn barrage comes at a time when the renewable energy sector is facing increasing problems.

Supporters of a barrage argue that it is second only to wind power in its ability to produce a substantial amount of electricity and in being a proven technology.

That is debatable, but what is certain is that the wind industry is facing increasing difficulties in getting projects off the ground.

Not only are wind farms becoming more likely to be rejected by local planners, investors are becoming increasingly put off by a perceived lack of political support, particularly in Wales.

This was highlighted in the summer when First Minister Carwyn Jones announced that the Welsh Government did not see the need for a large overhead pylon network in Mid Wales to connect wind farm developments to the grid.

The statement suggested the Welsh Government did not support major new wind farm developments since burying the power cables would add significantly to the cost.

The solar power industry has also had a hard time of it, although it is perhaps a victim of its own success.

The UK Government has twice changed the framework on feed-in tariffs (FITs), on both occasions causing disruption in the sector.

First it imposed an upper limit of 50 kilowatts (kw) on the size of installations entitled to FITs, killing off the development of large solar parks. Then it announced it was to half the FITs rate from 43p to 21p by December 12, a far larger and earlier cut than had been previously suggested.

Supporters of renewable energy hope new biomass and anaerobic digestion plants will take up some of the slack, but there is every likelihood these will also face local planning difficulties, as waste burning plants elsewhere have.

In this context, tidal energy projects could be the best hope for renewable energy.

by Chris Kelsey (walesonline)


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USA: Saratoga, McMoRan in Vermilion 16 Field JV Talks


Saratoga Resources and McMoRan Oil and Gas LLC (McMoRan) are in advanced talks regarding a potential joint venture on Saratoga’s Long John Silver Prospect at Vermilion 16 field.

While specific terms of the proposed joint venture are still being discussed and subject to confidentiality obligations, Saratoga anticipates contributing its deep rights (approximately 20,000 feet and below) to approximately 4,000 acres and access to Saratoga’s production and pipeline facilities in Vermilion 16 with McMoRan expected to contribute approximately 6,000 acres to the joint venture. The joint venture objective is expected to target ultradeep shelf Lower Tertiary (Wilcox) and Cretaceous objectives at depths of 23,000-30,000 feet subsea. All of the subject acreage is in Louisiana state waters in Vermilion Parish with water depths ranging from 5-10 feet.

The Long John Silver Prospect is situated in one of the main Lower Wilcox depositional fairways that fed McMoRan’s Davey Jones discovery on the Gulf of Mexico Shelf and the Walker Ridge Wilcox discoveries in Gulf of Mexico Deepwater.

Saratoga will retain its existing rights to all shallower objectives in the subject acreage, including all proved, probable and possible reserves, consisting of 8.7 million barrels of oil equivalent (MMBOE) of proved reserves and 18.6 MMBOE of total reserves at January 1, 2011. Additionally, Saratoga will retain the right to process its production from such shallower objectives at Saratoga’s production and pipeline facilities. Saratoga owns and operates a central production facility in Vermilion Block 16 with production capacity of 100 million cubic feet per day and a two mile pipeline to shore. Saratoga intends to continue its current development plans with respect to its shallower reserves in Vermilion 16, including drilling of development wells commencing in the first quarter of 2012.

Saratoga President, Mr. Andy Clifford, said “We are excited at the prospect of partnering with McMoRan in our ultradeep shelf play. McMoRan’s management team, under the visionary leadership of James Moffett, has established its position as a pioneer and the preeminent player in the ultradeep shelf play. We have gained valuable insights into the ultradeep Wilcox play through our involvement in the University of Texas Deep Shelf Consortium and through my years at BHP Billiton, a participant in the original Blackbeard well and a participant in the Cascade and Chinook Wilcox discoveries in Walker Ridge. We believe our Long John Silver Prospect has similar characteristics to recent high profile Wilcox successes, including McMoRan’s highly acclaimed Davey Jones well. Our 3D mapped deep shelf plays in Vermilion 16 and Grand Bay add exciting potential to our ongoing developmental drilling program.”


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