Daily Archives: March 8, 2012
|This week the SubseaIQ team added 12 new projects and updated 31 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.|
- Recap: Worldwide Field Development News (Feb 10 – Feb 16, 2012) (mb50.wordpress.com)
- Newfound Billions Of Barrels Of Shale Oil In Newfoundland (mb50.wordpress.com)
- WellEz Updates Wellbore Schematic Software for Drilling & Completion Reporting (mb50.wordpress.com)
- Lucius: Deepwater Gulf of Mexico (mb50.wordpress.com)
- Statoil Introduces New “Cat J” Jackup Rig for Norwegian Continental Shelf + [VIDEO] (mb50.wordpress.com)
Gulf Locals and Energy Experts Express Concern Over Decreased Gulf of Mexico Offshore Drilling Activity on Jobs, Economy
WASHINGTON, D.C., March 8, 2012 – Today, the Subcommittee on Energy and Mineral Resources held an oversight hearing on the Fiscal Year 2013 budget for the Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE). During the hearing, Committee Members heard testimony from Gulf of Mexico business leaders and energy experts who expressed deep concern over the slowdown in offshore permitting that has negatively impacted Gulf businesses and local economies.
“Production in the Gulf of Mexico is essential to our nation’s energy security – accounting for 29 percent of total U.S. crude production and 12 percent of total U.S. natural gas production. The thousands of businesses throughout the Gulf and nationwide that support this industry still struggle to stay afloat as a result of President Obama’s moratorium and the subsequent permitorium,” said Subcommittee Chairman Lamborn (CO-05). “We will hear from some of these stakeholders in the Gulf of Mexico, as well as review an analysis that shows that the pace of permitting is still well below historical averages.”
Historically low permitting has caused unemployment, economic instability and businesses to leave the Gulf of Mexico.
James Adams, President and CEO of the Offshore Marine Service Association (OMSA), which represents more than 100 firms that operate marine service vessels in the Gulf of Mexico, spoke to how devastating the permitting slowdown has been. “The economic impacts of this permit slow-down or de facto moratorium are diverse and farreaching, affecting individuals and businesses in various industries across the Gulf Coast…businesses are indeed laying off workers, reducing hours and salaries, and limiting new hires as a result of the permit slow-down.” Adams also mentioned the reoccurring theme of businesses moving overseas, “and postponing local expansion puts the regional economy on insecure ground, and the loss of businesses in the oil and gas industry to international markets has potential negative effects on the national economy.”
Brady Como, Ecxecutive Vice President of Delmar Systems, a leading supplier of offshore services in the Gulf, testified that slow permitting activity, “has not only had an impact upon our employees that were laid off, but also has been the driving force for the percentage of our international business outside the Gulf of Mexico more than doubling during that time.” To stay in business, his company has been forced to follow, “rigs leaving the gulf all over the world, from Brazil and Australia, to Trinidad, West Africa and the Mediterranean.” Como reminded Members that, “for every drilling rig that leaves, 200 jobs go with it. That impact is even greater when indirect jobs are considered.”
Benjamin Salsbury, Senior Energy Policy Analyst at SVP FBR capital Markets, confirmed that, “there are just 25 Mobile Offshore Drilling Units or ‘floaters’ and 15 platforms drilling. That is 12% fewer floaters than were operating before the Macondo spill despite crude oil prices more than 25% higher.” Salsbury continued to reiterate what local Gulf businesses already know, “there continues to be a permitting constraint on Deepwater Gulf of Mexico drilling activity.”
A study put forward by Greater New Orleans, Inc. estimates that of the Gulf businesses they surveyed:
- 41% said they were not making a profit;
- 50% said they have laid of employees as a result of the moratorium; and
- 82% said they have lost personal savings as a result of the permit slowdown.
- USA: Cobalt Excited About Return to Gulf Drilling (mb50.wordpress.com)
- USA: The Bedford Report Releases Equity Research on BP and ATP Oil & Gas (mb50.wordpress.com)
- Gulf drilling, economies remain sluggish (mb50.wordpress.com)
- Anadarko has Gulf of Mexico discovery (mb50.wordpress.com)
- Hercules sees more rigs in GOM (mb50.wordpress.com)
March 08, 2012 09:00 AM Eastern Time
NEW YORK–(BUSINESS WIRE)–Exxon Mobil Corporation (NYSE:XOM) plans to invest approximately $185 billion over the next five years to develop new supplies of energy to meet expected growth in demand, Chairman and CEO Rex W. Tillerson said today in a presentation at the New York Stock Exchange.
“During challenging times for the global economy, ExxonMobil continues to invest to deliver the energy needed to underpin economic recovery and growth,” Tillerson said in a presentation to investment analysts.
Tillerson said that even with significant efficiency gains, ExxonMobil expects global energy demand to increase by 30 percent by 2040, compared to 2010 levels. Demand for electricity will make natural gas the fastest growing major energy source and oil and natural gas are expected to meet 60 percent of energy needs over the next three decades.
To help meet that demand, ExxonMobil is anticipating an investment profile of approximately $37 billion per year through the year 2016.
“An unprecedented level of investment will be needed to develop new energy technologies to expand supply of traditional fuels and advance new energy sources,” said Tillerson. “We are developing a diverse portfolio of high-quality opportunities across all resource types and geographies.”
A total of 21 major oil and gas projects will begin production between 2012 and 2014. In 2012 and 2013, the company expects to start up nine major projects and anticipates adding over 1 million net oil-equivalent barrels per day by 2016.
At the meeting the company outlined its major achievements in 2011 and plans for the future. Highlights include:
- ExxonMobil replaced 107 percent of its 2011 production (116 percent excluding asset sales), increasing proved reserves to 24.9 billion oil equivalent barrels. It was the 18th consecutive year the company replaced more than 100 percent of its production, with proved reserve additions of 1.8 billion oil-equivalent barrels.
- Nine major upstream projects are expected to start-up in the next two years including four in West Africa, Kashagan Phase 1 in Kazakhstan and the Kearl Oil Sands project in Canada.
- In the downstream, the company completed a large project at the Thailand refinery, which is expected to increase the supply of lower sulfur motor fuels by more than 50 thousand barrels per day. Additional projects are under way, including new facilities at ExxonMobil’s Singapore refinery and at a joint-venture refinery in Saudi Arabia.
- A major expansion at the Singapore chemicals facilities is nearing completion. Commissioning and startup activities are expected to continue through 2012 and will provide a world-scale integrated platform with unparalleled feedstock flexibility. The expansion will add 2.6 million tonnes per year of additional capacity and will help meet demand growth in Asia Pacific.
This is the 10th year that ExxonMobil has made an annual presentation to analysts at the New York Stock Exchange.
CAUTIONARY STATEMENT: Projections, expectations, business plans, and other statements of future events or conditions in this release are forward-looking statements. Actual future results, including demand growth and mix; capital expenditures; resource recoveries; production rates and growth; and project plans, schedules, and outcomes could differ materially due to changes in market conditions affecting the oil and gas industry, including long-term oil and gas price levels; the occurrence and duration of economic recessions; future technological developments; political or regulatory developments; reservoir performance; timely completion of development projects; the outcome of commercial negotiations; unexpected technical or operating events; and other factors discussed in Item 1A of ExxonMobil’s most recent Form 10-K and posted in the Investors section of our website. (www.exxonmobil.com)
Proved reserves in this release, for 2009 and later years, are based on current SEC definitions, but for prior years the referenced proved reserve volumes are determined on bases that differ from SEC definitions in effect at the time. Specifically, for years prior to 2009 included in our statement of 18 straight years of at least 100 percent replacement, reserves are determined using the price and cost assumptions we use in managing the business, not the historic prices used in SEC definitions. Reserves determined on ExxonMobil’s pricing basis also include oil sands and equity company reserves for all periods. Prior to 2009, these volumes were excluded from SEC reserves.
“Resources” and “resource base” include quantities of discovered oil and gas that are not yet classified as proved reserves, but that are expected ultimately to be recovered in the future. The term “resource base” is not intended to correspond to SEC definitions such as “probable” or “possible” reserves.
See the “Frequently Used Terms” posted in the Investors section of our website for more information on proved reserves and resources.
ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is the largest refiner and marketer of petroleum products, and its chemical company is one of the largest in the world. For more information, visit www.exxonmobil.com.
Media Relations, 972-444-1107
- ExxonMobil, OMV Petrom Strike Gas Offshore Romania (mb50.wordpress.com)
- ExxonMobil Awards Technip GoM Subsea Contract (mb50.wordpress.com)
- Statoil, ExxonMobil Strike Gas Off Tanzania (mb50.wordpress.com)
- ExxonMobil, Petrom Strike Gas in Black Sea (mb50.wordpress.com)
- Alaska Governor, BP, Conoco and Exxon Discuss LNG Export (mb50.wordpress.com)
- Go Big or Go Home…ExxonMobil Announces Massive Spending Plan (gcaptain.com)
When sky-high gasoline pricestalks about today’s sky-high gasoline prices, he almost always laments that there’s little anyone can do in the short term to bring them down.
“There is no silver bullet” is his common refrain, one he used again at his press conference on Tuesday.
But as gasoline prices reach historic highs — they’ve shot up more than 28 cents a gallon in just the past month — the government could make a dent.
That’s because, while the global price of oil determines most of the cost of gasoline, several federal and state government policies artificially add to the cost before it reaches the gas station.
Taxes. The most obvious government-imposed costs are state and federal taxes and fees. Combined, these average 45.7 cents a gallon (the federal portion is 18.4 cents). New Yorkers pay the highest rate, at a combined 67.4 cents a gallon. California and Connecticut tie for second at 67 cents. Alaska is lowest at 26.4 cents, according to the Tax Foundation.
The weak dollar. Several analysts note that the Fed‘s devaluation of the dollar has led to higher oil prices, which in turn is adding as much as 56 cents per gallon, according to the congressional Joint Economic Committee.
“From the first day the Fed began engaging in quantitative easing back in early 2008, the impact on gas prices has been profound,” noted Eric Parnell, an economics professor at West Chester University, in a recent blog post. “What is even more irksome is that much of this rise in gasoline prices has occurred during a time when gasoline consumption has been falling. Have the laws of supply and demand been repealed? No, they’ve just been severely distorted by policy action.”
Boutique fuels. Thanks to federal and state rules, there are about 18 separate gasoline markets in the country, each with specific requirements about what can and can’t be in their gasoline, mainly to deal with local air quality issues. But the result is higher gasoline prices.
A Government Accountability Office report found that “the proliferation of special gasoline blends has made it more complicated to supply gasoline and has raised costs.” Refiners also have to switch each season between summer and winter blends, which boosts costs.
Environmental rules. In addition to creating local blends, refiners must also meet a long list of costly environmental rules. In late 1999, for example, the EPA required refiners to drastically cut the amount of sulfur in gasoline and diesel, which cost the industry almost $5 billion upfront and $1.5 billion each year to meet, according to the agency.
Strict environmental rules also can drive smaller refiners out of business, resulting in less competition, tighter supplies and higher prices.
Four refineries recently closed on the East Coast, for example. “That’s going to make gasoline more expensive in the region,” said John Hofmeister, the former Shell Oil CEO who has since started Citizens for Affordable Energy.
And as early as next year, the EPA could add dramatically to refinery costs, requiring them to meet new standards to reduce greenhouse gas emissions. The petroleum industry figures this “regulatory tsunami” will add 25 cents to each gallon of gasoline and shutter seven more refineries.
Ethanol mandate. January marked the end of a 45-cent federal subsidy for each gallon of ethanol refiners added to gasoline. The subsidy cost taxpayers $6 billion a year, but ending it could end up adding as much as 4.5 cents a gallon, since gasoline now includes 10% ethanol.
Congress also left in place a 2007 law requiring increasing amounts of ethanol (including so-called advanced biofuels) in gasoline, rising to 36 billion gallons by 2022. The ethanol industry argues that expanded use of ethanol cuts pump prices, pointing to a study saying it’s lowered them 25 cents a gallon on average. Others argue that because ethanol provides 30% less energy than gasoline, it’s actually more expensive on a per-mile basis.
“Any time you force the industry to do something they wouldn’t do otherwise, by definition you must be increasing costs somewhere,” said Michigan State University economist Soren Anderson, who studies the fuel industry. “If ethanol really were cheaper, you wouldn’t need the mandate.”
In any case, the law has cost refiners almost $7 million in fines this year after they failed to add 6.6 million gallons of “advanced biofuels” as required. The problem is these advanced biofuels don’t exist commercially, and nobody’s sure when they will, which means even bigger industry fines going forward as the mandated use increases.
Over the long term, meanwhile, federal restrictions on access to domestic supplies of oil cut production and to some degree affect the price of oil down the road. According to the Institute for Energy Research, the U.S. has huge oil reserves, thanks to new finds and advances in drilling technology that let companies retrieve once-inaccessible deposits. The IER estimates that there are 1.4 trillion barrels of “technically recoverable” oil in the U.S., which is more than the proved reserves of all OPEC countries combined.
New pipelines — such as the Keystone XL line that President Obama recently blocked — could help get a glut of oil from the northern U.S. and Canada down to Gulf Coast refiners.
“We can’t fix the world price of oil today,” says Ken Green, an energy expert at the American Enterprise Institute, “but there are things the government does that it could stop doing to lower the cost of gasoline.”
- Closing Refineries: EPA’s Heavy Hand Seen In Gas Crisis (tarpon.wordpress.com)
- Refiners push EPA to scrap gasoline rule that automakers want (business.financialpost.com)
- Ethanol Subsidy Ends; Will it Raise or Lower Prices at the Pump? (theoildrum.com)
- Gasoline Prices Continue March to $4 Everywhere (247wallst.com)