Daily Archives: January 12, 2012

Recap: Worldwide Field Development Jan 6 – Jan 12, 2012

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This week the SubseaIQ team added 13 new projects and updated 47 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.

Australia
Hess’ Drilling Ops Resume Offshore Australia
Jan 9, 2012 – Hess recommenced drilling operations at the Glencoe-2 appraisal well offshore Australia. The well was suspended in September 2011 when the semisub underwent problems. The well was drilled in 3,678 feet (1,121 meters) of water. Hess wholly owns and operates the WA-390-P permit, in which the discovery lies.
Project Details: Glencoe
Eni Acquires Bathurst 3D Seismic Survey over Blackwood Discovery
Jan 6, 2012 – Eni has completed the Bathurst 3D seismic survey covering the Blackwood East structure, acquiring 189,283 acres (766 square kilometers) of 3D data. This survey was acquired pursuant to a farm-in agreement with Eni to earn a 50 percent interest in the Blackwood gas discovery by acquiring a minimum 123,553 acres (500 square kilometers) of 3D seismic data over the Blackwood area and drilling on exploration well. Eni has up to a year to elect whether to drill the Blackwood-2 well. The Blackwood discovery is located in permit NT/P 38 offshore Australia in 200 feet (61 meters) of water.
Project Details: Blackwood
S. America – Other & Carib.
CGX Energy Commences Drilling Offshore Guyana
Jan 9, 2012 – CGX Energy has spud the Eagle-1 exploratory well offshore Guyana. The Ocean Saratoga (mid-water semisub) is drilling the well in the Corentyne license in about 270 feet (82 meters) of water.
Project Details: Eagle
Asia – SouthEast
PNOC, Nido Target Mid-2012 to Drill Commitment Well in SC 63
Jan 12, 2012 – PNOC Exploration Corporation and its partner, Nido Petroleum, have commenced pre-planning for the sub-phase three commitment well of Service Contract 63. The operator estimates that exploratory drilling on the Aboabo prospect will begin in mid-2012, subject to rig availability. The Service Contract 63 spans 2.6 million acres (10,560 square kilometers) in offshore Southwest Palawan, and includes the Aboabo A-1X gas discovery well.
Otto Planning to Drill Cinco in 2Q12
Jan 10, 2012 – The joint venture consortium of Service Contract 55 has elected to enter the fourth sub-phase of the drilling program, which requires a commitment well drilled prior to August 2012. The operator is planning to drill an offshore deepwater well at the Cinco prospect in 2Q 2012. Otto is working with farm-in partner BHP Billiton, who is carrying Otto’s share of expenditure on the drilling of Cinco well, to determine the 2012 work program. BHP Billiton has contracted Deepwater Expedition (UDW drillship) to drill the well. Otto Energy operates SC55, which is located offshore Palawan Island in the Philippines.
Talisman Sanctions HST/HSD Development
Jan 10, 2012 – Talisman has sanctioned the Hai Su Trang and Hai Su Den (HST/HSD) development within Block 15-2/01 offshore Veitnam. Production is expected to commence in 2013. The operator is planning to tie-back the development to the Hoang Long‘s facilities to the south of the block. The project is operated by Thang Long JOC, consisting of Talisman (60 percent) and PetroVietnam (40 percent).
N. America – US GOM
Aker to Provide Umbilicals for Lucius Development
Jan 12, 2012 – Anadarko granted Aker Solutions a contract for eight steel tube umbilicals for the Lucius field in the GOM. The scope of work includes project management, design, engineering, and manufacturing of two electro/hydraulic dynamic production umbilicals, two gas lift dynamic umbilicals, three electro/hydraulic infield umbilicals and one gas lift infield umbilical, including all associated ancillary equipment required for installation and interface with the existing development. Management, engineering and manufacturing of the umbilicals will be performed at Aker Solutions’ facility in Mobile, Ala. Final deliveries are slated for 3Q 2013. The Lucius field is located on Keathley Canyon Block 874, 875 and 919 in a water depth of about 7,000 feet (2,100 meters).
Project Details: Lucius
Hess Allocates $1.6B for Production Drilling on Shenzi, Llano
Jan 12, 2012 – Hess has allocated production expenditures of nearly US $1.6B for drilling production and water injection wells at Shenzi, and drilling production wells at the Llano field in the deepwater GOM. Situated on Green Canyon 609, Shenzi commenced oil/gas production on March 25, 2009, and currently has 11 production wells online. The Llano field, located on Garden Banks 385 and 386, came online April 29, 2004, via the Auger TLP.
Project Details: Shenzi
Alliance Engineering to Construct Topside, Deck for Tubular Bells FPS
Jan 11, 2012 – Wood Group’s Alliance Engineering received a detailed engineering and design contract of the topside facilities and deck, for Williams Partners’ Gulfstar FPS spar production platform. The platform, for installation in Mississippi Canyon Block 768, will produce oil and gas from the Tubular Bells field. The Gulfstar spar platform will be located in 4,300 feet (1,311 meters) of water and designed to process 60,000 bopd and 200 MMcf/d. The single-lift topsides will have three deck levels and include processing equipment, seawater injection equipment, utilities, an accommodation building with helideck, and pumping and compression equipment to export the treated oil and gas through departing pipelines. The completed deck will weigh approximately 7,000 short tons. Initial production is scheduled to commence in 2014.
Project Details: Tubular Bells
FMC to Supply Subsea Equipment for Lucius Development
Jan 10, 2012 – Anadarko awarded FMC Technologies a contract to provide subsea systems and life-of-field services for the Lucius project. FMC’s scope of supply includes five subsea production trees and two manifolds, with delivery slated for 4Q12. First oil is slated for 2014. Lucius is located in 7,100 feet (2,165 meters) of water on Keathley Canyon Block 875. Anadarko operates the field, holding a 50 percent interest; Co-owners in the discovery include Plains Exploration & Production with a 33.33 percent interest and Mariner Energy with 16.67 percent interest.
Project Details: Lucius
Africa – West
Hess to Drill Production Wells on Block G in 2012
Jan 12, 2012 – Hess plans to drill production wells on Block G in Equatorial Guinea in 2012. Block G houses the Okume Complex and the Ceiba field.
Project Details: Ceiba
Rialto to Commence Drilling Program Offshore Cote d’Ivoire
Jan 11, 2012 – Rialto Energy is prepping to commence a drilling program in Block CI-202, containing the Gazelle, Hippo and Bubale discoveries. The company has contracted the Transocean operated GSF Monitor (350′ ILC) jackup to drill a three-well program that will include two appraisal wells and the capability to test five independent structures. It is expected that the drilling program will commence in late February 2012. The Chouette well, which is part of the drilling program, will be the Company’s first exploration test in the CI-202 permit. Chouette has been assessed to have the potential to contain up to 212 million barrels of oil on a P50 base case. The block is located offshore Cote d’Ivoire, where Rialto Energy acts as operator.
Eni Divests Interest in Oyo Field
Jan 11, 2012 – Nigerian OML Agip Exploration, a subsidiary of Eni, has signed a definitive agreement to divest its 40 percent working interest in OML leases 120 and 121 (containing the producing Oyo field) to Allied Energy. The transaction is subject to customary conditions for closing and is expected to conclude during the first quarter of 2012. Once approved, Allied plans to expedite the development of the Oyo field by drilling two additional production wells commencing in 2012. These two wells are expected to significantly increase oil production over current levels. Allied also intends to accelerate exploration activities in the OMLs to fully exploit potential outside of the field, independently estimated at up to two billion barrels of unrisked prospective oil resources. The Oyo field is located on Leases 120 and 121, roughly 43 miles (70 kilometers) off the coast of Nigeria.
Project Details: Oyo
African Petroleum Grabs Block Offshore Cote d’Ivoire
Jan 10, 2012 – African Petroleum has entered into an agreement with the Societe Nationale d’Operations Petrolieres de la Cote d’Ivoire (Petroci) and the Republic of Cote d’Ivoire to acquire one offshore exploration permit covering Block CI-513. The block, situated in the Western Offshore area of Cote d’Ivoire, covers an area of 355,832 acres (1,440 square kilometers). The exploration program will target deepwater Upper Cretaceous submarine fans in the area, believed to have similar high impact potential as discoveries in the Jubilee field (in Ghana) and the Mercury discovery (in Sierra Leone). African Petroleum will operate the block with a 90 percent stake; while PETROCI will hold the remaining 10 percent stake.
Total Enters Mauritanian License
Jan 6, 2012 – Total has signed an exploration license with Mauritanian government to acquire a 90 percent interest in Block C 9, situated in ultra-deep waters. The National oil company, SMH, will hold the remaining 10 percent stake. The block is located about 87 miles (140 kilometers) offshore Western Mauritania, spanning more than 2.4 million acres (10,000 square kilometers), in water depths ranging from 8,202 to 9,843 feet (2,500 to 3,000 meters). The operator is planning a seismic acquisition campaign as the first phase of the exploration program.
African Petroleum Spuds Narina-1 Well
Jan 6, 2012 – African Petroleum has spud the Narina-1 well on Block LB-09 offshore Liberia. Narina-1 will primarily target a Turnonian prospect similar to previous discoveries. The company estimates the prospect has potential recoverable oil resources of 500 MMbbls to 1200 MMbbls for the Turonian reservoir, plus additional potential resources in both shallow and deeper reservoirs. The Maersk Deliverer (UDW semisub) is drilling the well.
Project Details: Narina
Europe – North Sea
Athena FPSO to Leave Dubai in Mid-February
Jan 12, 2012 – Ithaca Energy reported that the BW Athena FPSO is undergoing final conversion work at Dubai Dry Dock World. The vessel is scheduled to begin its transfer from Dubai to the UK in mid-February. The Athena field is slated for production in 1Q12 and flow at a rate of 10,000 boepd. The Athena field lies on Block 14/18b in 440 feet (134 meters) of water.
Project Details: Athena
Chevron Spuds P2-10 in Dutch North Sea
Jan 11, 2012 – Chevron has spud the P2-10 well in the Dutch North Sea. The well is targeting an existing gas discovery on the P2 block aiming to evaluate commercial hydrocarbon flow rates within the Rotliegendes sandstone reservoir.
Technip to Supply Subsea Equipment for Golden Eagle Development
Jan 11, 2012 – Nexen awarded Technip a lump sum contract for the Golden Eagle development located in the UK sector of the North Sea. The contract covers the engineering, procurement, installation and commissioning of two export, one production, one mechanically lined water injection and one gas lift flowlines; one main umbilical and two subsea isolation valve umbilicals; subsea equipments; trenching and backfilling of all flowlines and umbilicals; tie-ins, protection, pre-commissioning and commissioning support. The project is scheduled for completion in the second half of 2014. The development plan for Golden Eagle includes a combined production, utilities and an accommodation platform linked to a separate wellhead platform. Golden Eagle is located on Block 20/1N in 374 feet (114 meters).
Project Details: Golden Eagle
BP, Odfjell Drilling Secure Contract for Quad 204 Project
Jan 11, 2012 – BP awarded Odfjell Drilling a pre-contract award for the provision of a new build, semisubmersible drilling unit for use in the West of Shetland area. The contract value is about US $1.2 billion, excluding options, and represents the largest contract in Odfjell Drilling’s 40 year history. The unit will be used in the development of the Schiehallion and Loyal fields, which lie within Quadrants 204 and 205 of the UKCS about 81 miles (130 kilometers) west of Shetland and 22 miles (35 kilometers) east of the Faroe-UK median line. The full contract will have a fixed duration of seven years and is slated to start in 4Q 2014. BP operates the project.
Project Details: Schiehallion (Quad 204)
Yme Slated for Production in 2012
Jan 11, 2012 – SBM Offshore says that productivity of work being performed on the MOPUstor platform for the Yme field has been impacted due to poor weather conditions in the North Sea. The operator and SBM Offshore are currently evaluating the related schedule and cost impacts of the development. Yme will be developed by 12 production wells and injection wells, of which five will be subsea completions. The wells will connect to a production platform for processing. Production from the field is expected to commence in 2012 and reach a peak production rate of 40,000 bopd. Yme is situated in Production License 316, which Talisman Energy operates, holding a 70 percent interest; Revus Energy holds 20 percent; and Pertra ASA holds 10 percent.
Project Details: Yme
Lundin to Spud Albert Prospect Soon
Jan 10, 2012 – Lundin plans to spud the Albert prospect, located in PL 519, in the 1Q of 2012. The operator will use the Bredford Dolphin (mid-water semisub) to perform drilling operations. The well is targeting a major fault bound north of the Tampen Spur hydrocarbon province. Lundin operates the license with a 40 percent interest; while Spring Energy holds 20 percent; Noreco holds 20 percent; and Bayerngas holds 20 percent.
Valiant Obtains Interest in Timon Prospect
Jan 10, 2012 – Valiant has farmed into Blocks 211/11b and 211/16b in the UK sector of the North Sea acquiring a 10 percent stake from Agora Oil & Gas. The blocks contain the Timon prospect, an Upper Jurassic stratigraphic trap. The consortium plans to spud the prospect in 1Q 2012 using the WilHunter (mid-water semisub). Valiant estimates prospective resources to total 30 mmboe.
Wintershall Gets Govt Nod to Drill in North Sea
Jan 10, 2012 – The Norwegian Petroleum Directorate has granted Wintershall a drilling permit for well 6407/1-5 in the Norwegian sector of the North Sea. Appraisal well 6407/1-5 will be drilled using the Borgland Dolphin (mid-water semisub). The appraisal well lies in Production License 475 BS/CS, where Wintershall is the operator with an ownership interest of 50 percent. The other licensees are Petoro AS (30 percent) and Centrica (20 percent).
Centrica Plugs, Abandons Butch Southwest
Jan 10, 2012 – Centrica has ended drilling of a sidetrack well on the Butch South West exploration prospect in Production License 405 B. After successfully drilling the Butch discovery and first sidetrack appraisal well, the partnership decided to drill a second sidetrack well from the same surface location. The objective of the well was to target additional oil volumes in an exploration prospect located to the south of Butch within a new segment containing the same reservoir. However, problems were encountered while drilling the section above the main reservoir. The partnership plans to drill a new well located closer to the prospect. The well was plugged and abandoned. The partnership includes Centrica (operator, 40 percent), Faroe (15 percent), Suncor Energy (30 percent) and Spring Energy (15 percent).
Project Details: Butch
Valiant Gets Thumbs Up to Develop Causeway
Jan 10, 2012 – The Department of Energy and Climate Change has approved Valiant’s Causeway Field Development Plan. The Borgsten Dolphin (mid-water semisub) is booked to complete the existing production and water injection wells on the field with first oil targeted for the second half of 2012. Development plans call for the drilling of a new production well and a water injection well in the East and Far East fault panels. A production well will be completed with dual electrical submersible pumps. Hydrocarbons will be sent to and processed at the Cormorant North platform operated by TAQA Bratani Limited before being exported to the Sullom Voe terminal. Causeway is located on Blocks 211/22a and 211/23d in a water depth of 350 feet (107 meters) in the UK sector of the North Sea. Valiant operates the field.
Project Details: Causeway
Sterling Resources to Spud Cladhan South in 1Q12
Jan 10, 2012 – Sterling Resources issued a letter of intent to use the Sedco 704 (mid-water semisub) to drill the Cladhan South prospect in the first half of 2012. Cladhan South is an upper Jurassic channelized sand play immediately to the south of the existing Cladhan discovery. The Cladhan field is located on Blocks 210/29a and 210/30a in a water depth of 1,634 feet (498 meters). Serving as operator of the field is Sterling Resources, holding a 39.9% interest; EnCore holds 16.6%; Wintershall holds 33.5%; and Dyas holds the remaining 10%.
Project Details: Cladhan
Det norske Spuds Kalvklumpen Prospect
Jan 10, 2012 – Det norske has commenced drilling exploratory well, 25/6-4 S in license PL 414 in the Norwegian sector of the North Sea. The target for the well is the Kalvklumpen prospect, and drilling is being conducted by the Songa Delta (mid-water semisub). The partners in the license include Det norske (operator, 40 percent), Noreco (20 percent), Faroe Petroleum (20 percent) and Bayerngas (20 percent).
Project Details: Kalvklumpen
Drilling Ops to Bloom at Orchid Prospect
Jan 10, 2012 – Valiant plans to spud the Orchid prospect in the middle of the first quarter of 2012. The operator will use the Sedco 711 (mid-water semisub) to drill the well. Orchid is a dual target, four-way dip closure at Tertiary and Chalk level located in Block 29/1c in the UK sector of the North Sea. Valiant estimates gross prospective resources for the entire prospect to be 30 MMboe.
Project Details: Orchid
Statoil Makes Significant Discovery in Barents Sea
Jan 9, 2012 – Statoil has made a substantial oil discovery at the Havis prospect in Production License 532 in the Barents Sea. Well 7220/7-1, drilled by the Transocean Barents (UDW semisub), proved a 157-foot (48-meter) gas column and a 420-foot (128-meter) oil column. The operator estimates that the volumes in Havis are between 200 to 300 bbl of recoverable oil equivalents. The well reached a vertical depth of 7,218 feet (2,200 meters) in a water depth of 1,198 feet (365 meters). Statoil serves as the operator of PL 532 with a 50 percent stake; while Eni holds 30 percent and Petoro holds 20 percent.
Project Details: Havis
First Oil Acquires Stake in Kraken Discovery
Jan 9, 2012 – EnQuest has agreed with Canamens Limited to acquire two of its companies, whose assets include a 20 percent stake in the Kraken oil discovery. EnQuest will pay an initial consideration of US $45 million dollars in cash and a further $45 million in cash, contingent upon approval of the Kraken field development plan by the Department of Energy and Climate Change. Through this transaction, EnQuest will acquire a 20 percent interest in Blocks 9/2b and 9/2c, including the Kraken discovery. Kraken is estimated to hold gross contingent resources of 160 MMboe for Block 9/2b and 9/2c. EnQuest also acquired further potential exploration upside in Blocks 3/22a and 3/29 and in Blocks 9/6a and 9/7b. Kraken is a large heavy oil accumulation in the UK North Sea, located in the East Shetland basin, to the west of the North Viking Graben. It is being progressed to the development stage. Kraken FDP approval is anticipated in H2 2012. The operator of Kraken, Nautical, has a 50 percent interest, with the remaining 30 percent interest held by First Oil.
Project Details: Kraken
NPD Grants Statoil Drilling Permit for Well 30/6-28 S
Jan 9, 2012 – The Norwegian Petroleum Directorate granted Statoil a drilling permit for well 30/6-28 S in the Norwegian sector of the North Sea. The drilling permit for well 30/6-28 S relates to the drilling of a wildcat well in Production License 053. The area in this license consists of parts of Block 30/6 on the Oseberg field, between Oseberg A and Oseberg C. The Oseberg Center is located on Blocks 30/6 and 30/9 in the northern part of the North Sea at a water depth of 328 feet (100 meters). Statoil serves as the operator of the Oseberg Center and holds a 49.30 percent interest.
Project Details: Oseberg Center

Embargo On Iranian Oil Delayed By Six Months

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Eric Platt

A European Union embargo on Iranian oil will likely be delayed by six months, Bloomberg‘s Thomas Penny reports.

The E.U. is holding for countries including Italy, Greece and Spain to find alternative sources.

New York oil prices have fallen 1.8% on the news.

Iran is the second largest OPEC oil producer, with 3.6 million barrels recovered per day last month.

Source

Latin America : Business climate is king again

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By Brian Winter
SAO PAULO | Thu Jan 12, 2012 9:20am EST

(Reuters) – Here’s an economic riddle of sorts: Which economy grew faster over the last seven years? A) President Hugo Chavez‘s Venezuela, famous for its forced nationalizations and “21st century socialism,” or B) Chile, long renowned as a capitalist paradise for investors.

It might surprise some outsiders to learn that the answer is actually A. In recent years, commodities prices have dictated growth in Latin America more than any other factor, meaning that countries could trample on businesses but still grow briskly as long as they exported plenty of raw materials such as oil and iron ore to China and elsewhere.

Venezuela, the region’s No. 1 oil exporter, has averaged about 4.6 percent economic growth since 2005, compared to 4 percent in Chile, the world’s leader in copper. An even clearer example of commodities’ almighty reign was Argentina, which averaged 7 percent growth during the same period as record soy and other farm exports helped offset the government’s hostile stance toward energy companies and some other investors.

Now, it looks as if the trend is shifting. In Latin America, 2012 seems set to be the year in which business climate clearly reestablishes its supremacy as the main driver of growth.

The countries expected to grow the fastest in 2012 are also generally the ones that are perceived by the World Bank and others as treating investors the best. That means Chile, Peru and Colombia should lead the pack, while Venezuela and even Brazil will lag a step behind – just as they did last year.

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Graphic on region’s economies: r.reuters.com/bed95s

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What has changed? The global economy.

Demand for many commodities is expected to slacken in 2012 due to economic problems in buyer markets such as China and Europe. That means it will be up to Latin American countries to generate more of their own growth – and the ones that fare best will be those who have made their labor laws more flexible, cut red tape, and taken other steps to stimulate business.

“There’s no question we’re seeing a change,” said David Rees, Latin America economist for Capital Economics in London. “The external drivers of growth are drying up and these countries will have to look to other sources like investment in order to keep up the pace.”

A DOGFIGHT FOR FIRST PLACE AMONG INVESTORS

One way to measure the trend is by looking at the World Bank’s annual “Doing Business” study, which ranks the business climate in 183 countries around the world based on how well they protect investors; the ease of starting a business; the simplicity of paying taxes; and other factors.

The cluster of Latin American countries that rank a clear step above their other regional peers in the survey are Chile (39), Peru (41) and Colombia (42).

All three of those economies are forecast to grow 4.5 percent or more this year, according to the International Monetary Fund‘s latest forecasts, made in October. Countries that rank lower in the Doing Business survey, such as Guatemala (97), Brazil (126) and Venezuela (177) are all forecast to grow in the 3.5 percent range or lower.

The divergent trend is even more pronounced in more recent 2012 forecasts by Wall Street firms such as Morgan Stanley.

The region’s other two big economies also appear to be headed in opposite directions.

Growth in Argentina (113) is expected by the IMF to be around 4.5 percent this year – but that’s just about half of last year’s pace. Meanwhile, Mexico’s (53) relatively open, low-tax economy should show resilience, with growth of 3.6 percent – well above its roughly 2 percent trend level since 2005.

Most of the countries at the top of the economic league table have vigorously implemented pro-business reforms in recent years, often with the explicit goal of improving their standing in the Doing Business rankings.

Peru, Chile and Colombia have been battling each other for supremacy within Latin America for years, said Luis Plata, a former Colombian trade minister. “We fought hard to be first,” he said in an interview. “It became a competition.”

“The rankings improve your standing with investors, but … the real reason to do it is to help you identify deep changes in the system, things that will help your economy grow better,” Plata said.

For this year’s “champion,” the dividends are clear. Chile saw foreign investment of $13.79 billion in 2011, a historic high that contributed to the country’s fastest economic growth in years. A top Chilean official told Reuters last month that the government expects a new record in foreign investment this year.

STALLED REFORMS IN BRAZIL

In countries closer to the bottom of the table, attitudes are notably different.

Argentine President Cristina Fernandez has shown few signs of softening an antagonistic stance toward some investors that in recent years has seen her government nationalize private pension funds and face widespread suspicions of manipulating basic economic data such as inflation.

Venezuela’s economy remained buoyant for years thanks largely to its status as South America’s biggest oil exporter, but Chavez’s frequent confrontations with business have hollowed out much of the private sector and left the economy dependent on state spending.

In Brazil, Latin America’s largest economy, the picture is slightly more complex. While successive governments have catered to private enterprise to a much greater extent than Argentina and Venezuela, Brazil has also failed to push any major pro-business reforms through Congress in a decade.

As a result, investors have become frustrated with the country’s high costs and red tape. Brazil dropped six spots in the latest Doing Business survey – more than any other big economy in Latin America – and ranks in the world’s bottom third in categories such as trading across borders, dealing with construction permits, and ease of paying taxes.

Partly as a result of the business climate, some economists believe that Brazil may be downshifting into a new era of 3 percent to 4 percent economic growth, which would be a letdown after the faster pace of previous years.

“Brazil hasn’t kept pace with some other (Latin American) countries on some of the really important long-term questions, and they may pay the price for that,” said Gray Newman, chief Latin America economist for Morgan Stanley.

“People focus on things like inflation, and that’s good, but what about – How long does it take to open a business? How easy is it to hire and fire?” Newman said. “The economies that are moving forward are the ones that have looked at those metrics, and have put them at the heart of government policy.”

(Editing by Todd Benson and Kieran Murray)

Source

EU firms renew Iran oil deals to win sanction reprieve

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By Ikuko Kurahone and Dmitry Zhdannikov

(Reuters) – Italian, Spanish and Greek companies have extended most of their oil supply deals with Iran for 2012, so that most of Tehran’s supplies to the European Union are likely be exempted from sanctions for at least the first half of the year.

Trading sources told Reuters that Italy’s Saras (SRS.MI), ERG (ERG.MI) and Iplom, Greece‘s Hellenic (HEPr.AT) as well as Spain’s Repsol (REP.MC) have either extended or have not scrapped existing term supply contacts with Iran for 2012.

“We kept our 2-year deal with Iran,” said a trader with a refiner.

“At the moment it is business as usual, but of course we are considering potential alternatives. Asking the Saudis for more crude is one possibility,” said a trader with an Italian company.

Italy, Spain and Greece take some 500,000 barrels per day out of European Union’s imports of Iranian oil of around 600,000 bpd, according to the latest available data.

Diplomatic sources told Reuters the three countries, the EU’s most fragile economies, were pushing for a grace period for up to 12 months as an immediate switch to oil from other producers may prove too costly and painful for them.

Some diplomats said that when EU foreign ministers meet on January 23 to decide on sanctions, they will most likely agree on a compromise of six months for the grace period, and no longer.

Only existing deals would be granted that period while new or spot deals would not be exempted from sanctions.

European entities will also be allowed to continue receiving repayments in oil for debts they are owed by Iranian firms. These include Eni (ENI.MI) and Norway’s Statoil (STL.OL) to whom Tehran owes $2 billion and $0.5 billion respectively and pays in oil and petroleum gas (LPG).

“We expect a slow and gradual implementation of what will eventually become a full embargo,” said Mike Wittner from Societe Generale. “Europe has the same concerns about its fragile economy and an oil price spike as the U.S., probably even more.”

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Graphic on Iran’s oil exports: link.reuters.com/pyw35s

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Iran’s standoff with the West over its nuclear program has complicated Tehran’s oil exports and often prompts it to sell crude at steep discounts, appealing for struggling European refiners.

Most contracts are long-term annual supply deals and spot market sales are rare as U.S. sanctions against Iran make quick and smooth trade finance at banks almost impossible.

The EU is moving to impose sanctions at a time when the United States, which has banned Iranian oil imports since 1979, is acting to add Iran’s central bank to the sanctions list – a measure that will make it even more difficult to trade oil with Tehran, according to traders.

But even a full European oil embargo may not seriously weaken Iran, Its budget reaches breakeven with oil prices of just $81 per barrel as opposed to Thursday’s market level of

$114.

“If Iran is not able to send to other customers the oil that it would not sell to the EU, it could lose between 25-30 percent of its export volume but with oil prices 40 percent higher than its budget, it will probably not be enough to make a big difference for Iran,” said analyst Oliver Jakob of Petromatrix.

“To have an impact on Iran, the oil embargo needs to come together with much lower oil prices,” Jakob said. “What is required to have an impact on the regime is to have Iran lose a third to a half of its export volume and oil prices down to $60.”

LOOKING FOR ALTERNATIVES

U.S. officials have already travelled to China, South Korea and Japan to persuade Iran’s biggest customers in Asia to cut purchases. In Europe, real cuts will take time.

“A preliminary agreement hammered out by diplomats could be watered down before being signed by ministers. That is normally what happens in the EU in all spheres,” said Sam Ciszuk, a Middle East analyst at KBC Energy.

Diplomats and traders say the grace period would give European companies time to find alternative sources of crude, but the process would be far from smooth.

“Some (EU members) are saying: ‘help us find alternative suppliers and find a way to sustain the discounts we currently have’,” one diplomatic source said.

The problem of replacement supplies to Europe could be partially solved with the help of Saudi Arabia. European diplomats have spoken to the kingdom’s leadership who have signaled readiness to fill a supply gap, although concerns mount about the producer’s spare capacity nearing its limit.

But there is no reason why Riyadh would agree to supply crude at a discount to a buyer like Greece, traders said. Many in the oil market have already pulled the plug on supplies for fear that Athens might default on its debt.

Greek officials have said their country imports up to 40 percent of its oil from Iran and wants to continue the flow without disruption and on the same funding terms.

Italian refiner Saras said it received about 10 percent of its feedstock from the Islamic Republic in 2011.

“A ban on Iran exports would cause a shortage in heavy crude oils, putting further pressure on already high oil prices, and compressing margins for all refiners,” said Massimo Vacca, Saras’ head of investor relations.

Source

Rolls-Royce To Deliver World’s First 100% LNG-Powered Tugboat

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By gCaptain Staff On January 12, 2012

Rolls-Royce Marine has signed a contract to deliver highly efficient engines and propulsion systems for the world’s first Liquid Natural Gas (LNG) powered tugs.

The two vessels have been ordered by Norwegian company Buksér og Berging AS and will enter service in late 2013 for Statoil, the international energy company, and Gassco, the operator of the gas transportation network off the Norwegian coast.

Robert Løseth, Rolls-Royce, Senior VP – Merchant, Propulsion Systems and Engines said:

This is a breakthrough for our Bergen gas engines and cutting edge propulsion technology. The choice our customer has made highlights the industry leading engine performance, fuel consumption and low methane emissions that Rolls-Royce can offer, which is now being applied to tugs.

LNG powered ship azimuth drive rolls royce
In addition to two gas engines and a single LNG tank, Rolls-Royce will deliver a mechanical direct driven azimuth propulsion system for each tug that will provide the quickest response time for manoeuvring; which is critically important for tug operators. The combined power and propulsion system will also enable the lowest possible fuel consumption in all operating modes. Rolls-Royce will also provide automation and control systems for the two escort vessels.

Commercial Director at Buksér og Berging AS, Vetle Sverdrup said:

We wanted to base the design of the new tugs on the spark ignition lean burn engine concept, and the ability to accommodate direct drive in addition to a low emission profile. The propulsion system on high performance escort tugs needs to accommodate rapid load pick up over the entire load range. Due to the above we chose to work closely with Rolls-Royce on this project

The scope of supply for Rolls-Royce in this contract is:

  • 2x US35 Aquamaster
  • 2x Bergen C6 Ing engines, mechanical drive
  • RR Acon control and monitoring for gas system
  • 1x AGA Cryo LNG tank with LNG system based on two coldboxes

The LNG system is designed by AGA Cryo and integrated with the Rolls-Royce propulsion system. This single tank LNG system has got full gas redundancy approved by NMD (Norwegian Maritime Directorate) i.e. no diesel back up is required.

Operational Benefits:

  • Cleaner engine room
  • Less waste oil and no “switch over” problems
  • Easier to service
  • Less maintenance required

The gas engines can operate on low load with out any restriction and have a very quick and step less ramp up time from 0 to 100% load.

Bunkering:
The fuel system is designed for weekly bunkering intervals and the bunkering time is estimated to be 45 minutes. Bunkering will be carried out by the ship’s crew.

Nox emissions are lower at low engines loads, which are the reverse trend of most diesel engines, making it the optimal solution for tugs which are spending most of the time at lower engine loads.

Environmental Benefits Of Spark Ignited Gas Engines:

  • 92% reduced NOx emission
  • 17% reduced GHG emission
  • 98-100% reduced SOx emission
  • 98% reduced particulates
  • No oil spill during bunkering
  • No oil spill in ship engine room bilges
  • No sludge from purifiers
  • No FO waste-/leak oil
  • No FO oil spill, reduced Fire Risk
  • Long-term compliance with local port regulations and potential benefits from taxation/green port dues
  • Compliant with Tier III regulations

The vessels are designed by Buksér og Berging AS together with Marin Design AS in Kolvareid, Norway. The project was developed in close contact with Rolls-Royce giving Rolls-Royce a unique opportunity to understand and adhere to operational requirements. The vessels have the following specifications:

  • Loa:    35.00m
  • Lpp:    30,54m
  • Bm:     15.40m
  • Draft:   7.50m
  • Accommodation for 7 persons

Related Articles:

  1. Rolls-Royce wins contract to power fuel efficient ferries
  2. PaxOcean orders two Rolls-Royce designed offshore vessels
  3. Rolls-Royce to power ten Littoral Combat Ships for the U.S Navy
  4. Carnival Cruise Lines awarded $24M in lawsuit against Rolls Royce
  5. Rolls-Royce and Bestway unveil new energy efficient ship designs

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Norway: Ulstein Launches New Platform Supply Vessel for Blue Ship Invest

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Ulstein Group, a group of companies mainly known for its ship building and ship design activities reported today that the first platform supply vessel (PSV) newbuilding of the PX121 design from ULSTEIN®, M/V Blue Fighter, was named in a formal ceremony at Ulstein Verft, Norway on 12 January.

The vessel, 83.4 m of overall length,  is the first of two PSVs of the new design under construction at Ulstein Verft for Blue Ship Invest, a shipping company in ULSTEIN. Blue Fighter’s sister vessel will be delivered in Q3 of 2012.

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USA: Hess to Splash USD 6.8 Billion in 2012

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Hess Corporation, with headquarters in New York announced today a 2012 capital and exploratory budget of $6.8 billion, nearly all of which is targeted for Exploration and Production: $2.5 billion for unconventionals, $1.6 billion for production, $1.8 billion for developments and $800 million for exploration.

John B. Hess, Chairman and CEO, stated, “We believe that the investments we are making in unconventionals are lower risk and will generate long term profitable growth for shareholders. We expect to fund the majority of our 2012 program from internally generated cash flow and asset sales.”

Greg Hill, President of Worldwide Exploration and Production, said, “Our focus in 2012 will be on execution. We are committed to creating value and delivering sustainable growth in production and reserves from both our unconventional and conventional portfolios.”

Production expenditures of approximately $1.6 billion include:

  • Drilling production and water injection wells at Shenzi (Hess 28 percent), and drilling production wells at the Llano Field (Hess 50 percent) in the deepwater Gulf of Mexico
  • Drilling production wells on Block G (Hess 85 percent – operator) in Equatorial Guinea

Development expenditures of approximately $1.8 billion include:

  • Commencing development drilling at the Tubular Bells Field (Hess 57 percent – operator) in the deepwater Gulf of Mexico
  • Completion of field redevelopment and gas lift projects at the Valhall Field (Hess 64 percent) in Norway
  • Concluding appraisal activities and progressing front end engineering and design work at WA-390-P (Hess 100 percent – operator) offshore Western Australia
  • Progressing development of Block A-18 (Hess 50 percent) in the Joint Development Area (JDA) in the Gulf of Thailand, including wellhead platform installations and ongoing drilling activities

Exploration expenditures of approximately $800 million include:

  • Drilling exploration wells in Ghana, Indonesia, Brunei and the deepwater Gulf of Mexico
  • Acquiring seismic at the Dinarta and Shakrok Blocks (Hess 80 percent – operator) in Iraqi Kurdistan

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USA: Aker Solutions to Provide Umbilicals for Anadarko’s Lucius Development

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Aker Solutions has been awarded a contract for eight steel tube umbilicals by Anadarko Petroleum Corporation for the development of Lucius offshore field in the Gulf of Mexico.

The company did not disclose the contract value.

The scope of work includes the project management, design, engineering, and manufacturing of two electro/hydraulic dynamic production umbilicals, two gas lift dynamic umbilicals, three electro/hydraulic infield umbilicals and one gas lift infield umbilical, including all associated ancillary equipment required for installation and interface with the existing development. These umbilicals will utilise the patented Aker Solutions PVC profile matrix, which provides both predictable estimates of fatigue and friction, and improved crush and impact resistance.

“This contract award is an excellent step towards our goal of supplying equipment for Anadarko across many product lines, including umbilicals,” says Tove Røskaft, executive vice president of Aker Solutions’ umbilicals business area.

Management, engineering and manufacturing of the umbilicals will be performed at Aker Solutions’ facility in Mobile, Alabama.

Final deliveries will be made in Q3 2013.

The Lucius field is located in the Gulf of Mexico approximately 275 miles (442 kilometres) southwest of Fourchon, Louisiana in Keathley Canyon (KC) Block 874, 875 and 919, in a water depth of approximately 7 000ft (2 100 metres).

Truss spar

Lucius will be developed with a truss spar floating production facility with the capacity to produce in excess of 80,000 barrels of oil per day and 450 million cubic feet of natural gas per day. The spar is currently under construction at Technip’s facility in Pori, Finland and will be the largest of Anadarko’s operated spars — a deepwater production solution pioneered by the company in 1997.

The Lucius unit includes portions of Keathley Canyon blocks 874, 875, 918 and 919. Anadarko operates the unit with a 35-percent working interest.

Co-venturers in the Lucius unit include Plains Exploration & Production Company with a 23.3-percent working interest; Exxon Mobil Corporation​​ ​ with a 15-percent working interest; Apache Deepwater LLC, a subsidiary of Apache Corporation with an 11.7-percent working interest; Petrobras with a 9.6-percent working interest; and Eni with a 5.4-percent working interest.

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