Daily Archives: March 15, 2012

Namibia: BP Joins Serica in Exploration Offshore Namibia


Serica Energy plc announces that, subject to the consent of the Ministry of Mines and Energy in Namibia, BP will be joining Serica in the exploration of Licence 0047 offshore Namibia by farming-in to Serica’s interest.

The Licence, comprising Blocks 2512A, 2513A, 2513B and 2612A (part), was recently awarded to Serica Energy Namibia B.V. (a wholly owned subsidiary of Serica) and covers an area of approximately 17,400 square kilometres in the deep water central Luderitz Basin. Serica currently has an 85% interest in the blocks. Its partners are the National Petroleum Corporation of Namibia (Pty) Limited (“NAMCOR”) (10%) and Indigenous Energy (Pty) Limited (“IEPL”) (5%). Both NAMCOR’s and IEPL’s interests are carried by Serica for prescribed work programmes.

Under the transaction, BP will pay to Serica a sum covering Serica’s past costs and earn a 30% interest in the Licence by meeting the full cost of an extensive 3D seismic survey. As a result of the farm-out, Serica’s interest in the Licence following completion of the seismic survey will be 55%. Serica has also announced today that it has signed a contract with Polarcus Seismic Limited to acquire up to 4,150 square kilometres of 3D seismic across the Licence .

The deep water geological basins offshore Namibia, including the Luderitz Basin, are at the early frontier stage of exploration. Although the presence of very large structures have been shown to exist from seismic surveys, very few wells have been drilled in the deeper water Namibian basins to date and the full hydrocarbon potential of the area has not yet been fully tested. Water depths in Serica’s Luderitz Basin blocks range from 300 to 3,000 metres. Drilling in these depths of water, whilst becoming more commonplace in the industry, requires sophisticated drilling techniques and equipment and is very costly.

Serica has therefore granted an option for BP to increase its interest in the Licence by meeting the full cost of drilling and testing an exploration well to the Barremian level before the end of the first four year exploration period. In the event that this option is exercised, Serica’s interest in the Licence will be 17.5% carried through the first well, which will have very considerable value if the exploration drilling is successful.

Serica will continue to be the operator of the Licence during the initial seismic period with BP taking over as operator if it exercises its option to drill and test a well.

Tony Craven Walker, Serica’s Chairman and Interim Chief Executive said:

“Serica’s licence interests in the emerging Atlantic margin basins offshore Ireland, Morocco and Namibia are attracting growing industry interest. In Namibia we recognise the benefits of having a partner who brings technical and development expertise to the group to  complement Serica’s early stage exploration capability.

We are therefore very pleased that BP has decided to join Serica and its partners in the exploration of the Luderitz Basin blocks. The blocks, located in the centre of the largely unexplored Luderitz Basin, cover a very large area and contain multiple play types with considerable  potential. We were awarded the blocks only two months ago and, with BP now participating in the exploration effort, we are able to make a very fast start to what is likely to be a considerable and potentially very rewarding exploration programme.”


USA: Vantage Drilling Reports Record Revenues


Offshore drilling contractor, Vantage Drilling Company, reports a net loss of $9.3 million for the 4th quarter, 2011 as compared to a net loss of $13.0 million for the 4th quarter, 2010.

Net loss for the full year, 2011 was $54.8 million, excluding approximately $25.2 million of charges for the early retirement of debt as compared to a loss of $19.8 million in the prior year period, excluding approximately $27.8 million of acquisition and refinancing charges. Including the acquisition and refinancing charges, Vantage reported a net loss $80.0 million for the full year 2011 as compared to a net loss of $47.6 million in 2010.

The company reported record revenues of $485 million for full year 2011 compared to $278 million in 2010.

Paul Bragg, Chairman and Chief Executive Officer, commented, “We are very pleased to announce record annual revenues and income from operations. Vantage continues to deliver operational excellence. Our jackup fleet had outstanding productive time for the year in excess of 99% and the Platinum Explorer completed its initial year of operations with productive time in excess of 92%. Market conditions are improving, particularly for new, modern rigs like ours.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs and the ultra-deepwater drillship, the Platinum Explorer, as well as an additional ultra-deepwater drillship, the Tungsten Explorer, now under construction. Vantage’s primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned and managed drilling units, Vantage is a provider of offshore contract drilling services globally to major, national and large independent oil and natural gas companies.


Recap: Worldwide Field Development News (Mar 9 – Mar 15, 2012)


This week the SubseaIQ team added 9 new projects and updated 27 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.

S. America – Other & Carib.
Bayfields Hits Oil Offshore Trinidad & Tobago
Mar 13, 2012 – Bayfield Energy has suspended a well as an oil and gas discovery in the Galeota License at the EG8 field offshore Trinidad and Tobago. The well reached a total depth of 8,133 feet (2,479 meters). EG8 was deviated from its surface location towards the southwest area in order to target the crestal area of mapped horizons in the prospective EG2/EG5 Central fault block. The well encountered 10 hydrocarbon-bearing sandstone reservoir zones between 1,364 feet (416 meters) and 6,000 feet (1,829 meters) below mean sea level. Preliminary analysis indicates that the vertical thickness of net hydrocarbon-bearing sands total 421 feet (128 meters) of which 352 feet (107 meters) is gas and 69 feet (21 meters) is oil. A comprehensive program of logging and sampling was conducted, samples of oil were collected and a mini drill stem test was performed during the analysis. The data confirms light oil and a good quality reservoir with production potential of over 1,000 bopd. Samples of gas and gas condensate were also collected in other reservoirs. Bayfield is currently integrating the new well data into the 3D seismic mapping to study the impact on contingent and prospective resources. Bayfield believes that EG8 has demonstrated development potential of 32 MMbbls of oil and 69 Bcf of gas in the EG2/EG5/EG8 Central and East fault blocks. The jackup Rowan Gorilla III (450′ ILC), which is currently suspending the well, will move to the EG7 location to drill the second well in the company’s exploration and appraisal drilling program in the Galeota license.
Project Details: EG8
Africa – West
BP Enters Serica-Operated License Offshore Namibia
Mar 15, 2012 – BP will farm-in to Serica Energy’s License 0047, offshore Namibia, subject to the consent of the Ministry of Mines and Energy in Namibia, in the exploration of License 0047 offshore Namibia by farming-in to Serica???s interest. The license, comprising Blocks 2512A, 2513A, 2513B and 2612A (part), was recently awarded to Serica Energy Namibia B.V. (a wholly owned subsidiary of Serica) and covers an area of approximately 4.2 million acres (17,400 square kilometers) in the deep water central Luderitz Basin. Serica currently has an 85 percent interest in the blocks. Its partners are the National Petroleum Corporation of Namibia Limited (10 percent) and Indigenous Energy Limited (5 percent). Under the agreement, BP will pay Serica a sum covering Serica’s past costs and earn a 30 percent interest in the license by meeting the full cost of an extensive 3D seismic survey. As a result of the farm-out, Serica’s interest in the license following completion of the seismic survey will be 55 percent. Serica has also signed a contract with Polarcus Seismic Limited to acquire up to 1 million acres (4,150 square kilometers) of 3D seismic across the license.
Rialto Energy Spuds Gazelle Well
Mar 13, 2012 – Rialto Energy has spud the Gazelle-P3 production well on the CI-202 Block offshore Cote D’Ivoire, West Africa. The operator is using the jackup GSF Monitor (350′ ILC) for the drilling operations. The well has a planned total depth of about 11,155 feet (3,400 meters) and is expected to take around 60 to 70 days to drill and test. The well is the first of a three-well drilling program on CI-202. It is expected to take six months to complete including testing. The Gazelle-P3 well, which will be drilled from the Gazelle subsea template, will be drilled as a deviated hole targeting already tested sands over the Upper Cenomanian reservoirs. It will be deepened to test a combined structural/stratigraphic trap in the Lower Cenomanian section. The well is situated on the northern flank of the Gazelle structure.
Project Details: Gazelle
N. America – US GOM
First Subsea to Supply Mooring Line Connectors for Lucius Spar
Mar 15, 2012 – First Subsea received a contract from Technip to supply the mooring line connectors for a new spar platform moored in 7,000 feet (2,134 meters) of water in the Lucius field, located at the Keathley Canyon Block 875 in the Gulf of Mexico. The Lucius spar will be moored by nine Ballgrab ball and taper mooring connectors attached to polyester mooring lines. The field is currently under development with first production slated for 2014.
Project Details: Lucius
Anadarko Turns on Caesar/Tonga Taps in Deepwater GOM
Mar 12, 2012 – Anadarko commenced production at the Caesar/Tonga joint development in the Green Canyon area of the deepwater GOM on March 7, 2012. Production from Caesar/Tonga, with an estimated resource base of 200 to 400 million barrels of oil equivalent (boe), is expected to ramp up to approximately 45,000 boepd from the first three subsea wells. A fourth development well is expected to be drilled and completed later this year, as part of the planned phase I development. The subsea satellite wells are tied-back to the Constitution Spar floating production facility.
Project Details: Constitution
MidEast – Red Sea
BP Commences Production in Gulf of Suez
Mar 13, 2012 – Oil production has commenced from the NS377 field at Beach’s North Shadwan concession with oil flowing via a tie-in to Petrobel’s nearby Ras Ghara oil facility and then by pipeline to the main Petreco Oil Centre at Abu Rudeis. The oil from the NS377 oilfield will be treated at the Ras Ghara plant before being piped to the main Petreco Oil Centre and marine terminal, 75 miles (120 kilometers) to the north. Initial production via the pipeline will be restricted to approximately 1,000 bopd with further production from the NS377 field to be handled via a trucking operation, which is expected to commence in 2Q 2012.
Project Details: NS377
Africa – Other
Anadarko Successfully Completes Well Test at Barquentine
Mar 12, 2012 – Anadarko reported that the Barquentine-2 well flowed gas at an equipment-constrained rate of between 90 and 100 million cubic feet per day. The company said that test data supports potential unconstrained flow rates of up to 200 MMcf/d. The Barquentine-2 well is located in a water depth of approximately 5,400 feet (1,646 meters). The drillstem test was conducted by the Deepwater Millennium (DW drillship), which is set to move to the Barquentine-1 location for a second flow and interference test in the complex.
Project Details: Barquentine
S. America – Brazil
Chevron Suspends Ops at Frade Field
Mar 15, 2012 – Chevron has requested authorization for a temporary suspension of field production operations at the Frade field in the Campos Basin in Brazil. The decision to request the shut-in is a precautionary measure based on the company identifying a small new seep in the field and in the area. The company will conduct a comprehensive technical study and prepare a complementary study to better understand the geological features of the area, working with their partners and seeking necessary approvals from National Petroleum Agency (ANP). The company has filed its request before the appropriate regulatory agencies and anticipates a response in a short timeframe. The Frade field currently produces a total of approximately 60,000 barrels per day.
Project Details: Frade
Petrobras Finds Oil at Nordeste de Tupi
Mar 9, 2012 – Petrobras has successfully drilled a well in an area known as Nordeste de Tupi, located northeast of the Lula field. The well was drilled in 6,991 feet (2,131 meters) of water about 158 miles (255 kilometers) offshore Rio de Janeiro. An oil column of more than 951 feet (290 meters) was identified in carbonate pre-salt reservoirs. Well tests show the reserve contains oil rated at 26 degrees API. The operator is planning to perform a well-formation test to evaluate the well’s productivity after drilling is completed. Petrobras is accelerating development of the pre-salt fields, with plans to invest $255 billion through 2014 to increase crude oil output, reported Dow Jones Newswires.
Europe – North Sea
Wintershall Plans to Appraise Hibonite Discovery
Mar 15, 2012 – Wintershall is planning to drill an exploration well at its Hibonite discovery in the Danish North Sea. Hibonite is located on Block 4/06, which Wintershall operates with a 35 percent stake.
Providence Reports Successful Flow Test at Barryroe
Mar 15, 2012 – Providence Resources has successfully flowed oil and gas at its Barryroe appraisal well, offshore southern Ireland. A 24-foot (7-meter) thick net pay interval in the oil bearing basal Wealden sandstone section was perforated as the first phase of the well testing program. Stabilized flow rates of 3,514 bopd and 2.9 MMcf/d (4,000 boepd) were achieved through a 68/64-inch choke with a well head pressure of 517 pounds per square inch without the use of an artificial lift. Analysis has confirmed that the oil is light with a gravity of 42-degree API and a wax content of 20 percent. The 48/24-10z Barryroe appraisal well is located in around 320 feet (100 meter) water depth, approximately 30 miles (50 kilometers) offshore Ireland at the Standard Exploration License (SEL) 1/11 in the North Celtic Sea Basin.
Project Details: Barryroe
Taqa Bratani to Commence Drilling Program in North Sea
Mar 15, 2012 – Taqa Bratani is gearing up to commence an exploratory drilling program in the North Sea, which includes exploration wells on the Timone, Contender, Cladhan and Darwin prospects. The company has contracted the Transocean John Shaw (mid-water semisub) for the drilling program. Taqa also has platform-based rigs, and after working on Tern its drilling crew is to move to the North Cormorant field.
Project Details: Contender
Aker to Design World’s Largest Spar Platform for Luva Development
Mar 15, 2012 – Aker Solutions has received a FEED contract from Statoil to design the world’s largest spar platform for the Aasta Hansteen (formerly Luva) field in the Norwegian sector of the North Sea. With a total hull length of 633 feet (193 meters) and a draught of 558 feet (170 meters), the Aasta Hansteen spar platform is a cylinder shaped floating offshore installation. Aasta Hansteen will be the first spar platform on the Norwegian continental shelf (NCS), and also the world’s first Spar platform with condensate storage capacity – a so called belly-spar, stated Aker. The FEED study will be completed in the third quarter of 2012. The development concept will include two subsea templates with four wells on each and one satellite template with one well. The field is currently under development with first oil slated for 2014.
Project Details: Luva
Statoil Shuts-in Statfjord C
Mar 15, 2012 – Statoil has shut-in production at the Statfjord C platform in the Norwegian sector of the North Sea following a gas leak. The leak of the poisonous and flammable gas hydrogen sulfide, H2S, happened in a utility shaft, and was identified as a flange to the wall against a storage cell. Statfjord C is one of several platforms in the greater Statfjord area, and produces about 25,000 boepd.
Project Details: Statfjord Area
Ocean Installer Receives LOI for Bentley Export Oil Pipelines
Mar 13, 2012 – Ocean Installer received a letter of intent from Xcite Resources for the installation of two oil export pipelines from the jackup Rowan Norway (400′ ILC) to a shuttle tanker. Work will commence in April 2012 using the subcontracted vessel from Reef Subsea Power and Umbilical. The operator is beginning step 1A of its planned development program for Bentley. The first phase of development compromises one production well with two laterals, producing across the jackup through a process kit to degas and stabilize the crude, prior to pipeline transfer to a dynamically positioned shuttle tanker.
Project Details: Bentley
Hertel to Construct Additional Living Quarters for Buzzard Platform
Mar 13, 2012 – Hertel’s offshore division received a contract to design, build and modify living quarters on Nexen Petroleum’s Buzzard platform in the UK sector of the North Sea. The contract includes engineering, procurement and construction of living quarters for an additional 60 people, which will increase the onboard capacity of the platform to 180. Fabrication began at the end of February 2012. The Buzzard oil and gas field commenced production on Jan. 7, 2007.
Project Details: Buzzard
RWE Dea Acquires 10 Percent Stake in PL 418
Mar 12, 2012 – RWE Dea has entered into an agreement with Wintershall to acquire 10 percent equity in Production License 418 in the North Sea. The first well (35/9-7) in PL 418 will test the hydrocarbon potential of the Skarfjell prospect. Under the new interest holders, Wintershall will hold a 35 percent operating interest. Partners will include Bayerngas (20%), Agora (20%), Edison (15%) and RWE Dea (10%).
NPD Gives Noreco Thumbs Up to Drill Eik Prospect
Mar 9, 2012 – The Norwegian Petroleum Directorate has awarded Noreco a drilling permit for well 7228/1-1 on the Eik prospect in the North Sea. The well will be drilled using the Transocean Barents (UDW semisub) in Production License 396.
Project Details: Eik


Norway: NPD Supports Statoil’s New Rig Concept for Subsea Wells


The NPD encourages licensees in Statoil-operated production licences to support Statoil’s plans for using a new type of rig that is specially adapted for maintenance of subsea wells.

A letter sent to the relevant companies points out that recovery from producing fields is an important commitment area for the Norwegian Petroleum Directorate. An increasing percentage of the oil production on the Norwegian shelf comes from subsea wells, and the number of wells is increasing. The NPD has noted that it could be challenging to both drill new sidetracks from the subsea wells and carry out maintenance.

“That is why the Norwegian Petroleum Directorate is concerned with finding good solutions that can contribute to maintaining or increasing production from subsea wells,” says Torsten Bertelsen, director responsible for the Norwegian Sea and Barents Sea.

Statoil has long worked on a new type of rig for subsea wells, a so-called category B rig. It is permanently equipped for cables, coiled tubing and slim hole drilling and is specially adapted to well intervention campaigns. This type of rig can be used on multiple fields with subsea wells.

Use of such a rig will contribute to improve rig capacity, increase the number of subsea wells and thus improve recovery from subsea wells.

In the letter to the licensees the Norwegian Petroleum Directorate asks the companies to support Statoil’s project or to present alternative measures or projects that can yield similar effects.

“A cooperation on the new rig type across production licences is considered good resource management,” says Bertelsen.


Exposing the 2 percent oil reserves mythInstitute for Energy Research

“The United States holds only 2% of the planet’s proven oil reserves,” President Barack Obama[i]

According to President Obama, the United States contains only 2 percent of the planet’s proven oil reserves, Of course, he’s right — to a point. In classic fashion, he’s using a technicality to skirt the facts and keep the myth of energy scarcity alive. The reality is that the U.S. has enough recoverable oil for the next 200 years, despite only having 2 percent of the world’s current proven oil reserves.

Proven oil reserves are not all of our oil resources—not even close. In fact, proved reserves represent a tiny portion of our total oil resources. Proven (or proved) oil reserves are reserves that have already been discovered, typically through actual exploration or drilling, and which can be recovered economically. That estimate does not include oil that we know about, yet are unable to access because of regulatory barriers. For example, the billions of barrels of oil in ANWR are not included in our proved oil reserves.  So let’s look at the facts.

Currently, the United States has 1,442 billion barrels of technically recoverable oil, but only about 20 billion barrels are considered proven oil reserves.[ii] That is partly because the federal government is denying access to hundreds of millions of acres oil-rich federal lands: the Alaskan National Wildlife Refuge, the Naval Petroleum Reserve-Alaska, federal waters off the Atlantic and Pacific coasts, at least 45 percent of the Gulf of Mexico, the Chukchi and Beaufort Seas, and oil shale on federal lands in Colorado, Utah, and Wyoming, to name a few. In the case of oil shale (an oil composed of kerogen), technology needs to be perfected to make its production viable, but this will not happen until the land is leased. Regrettably, the Department of Interior has stopped a leasing program Congress directed it to undertake.

Proved Oil Reserves Are Not Static

Let’s take a look at history. In 1944, U.S. proven oil reserves were 20 billion barrels — about the same as they are today. Yet, between 1945 and 2010, the United States produced 167 billion barrels of oil. In other words, the United States produced over 8 times more oil than the amount of proven oil reserves it had in 1944.  How can that be? The answer is that proven oil reserves are not stagnant because people keep looking for oil. Proven oil reserves keep changing, are officially recorded every year, tallied country by country, and published in the Oil and Gas Journal, among other publications. And due to U.S. entrepreneurship and ingenuity, more reserves are found and proven each year.

What happens is one or more of the following: 1) technology is found that converts hard-to-produce resources into proven reserves, 2) oil prices increase to allow more expensive types of oil to be produced, and/or 3) companies are able to purchase additional leases and explore for new basins of oil. An example of the first case where technology enables oil resources to become proven reserves is hydraulic fracturing and horizontal drilling used to produce shale oil resources, most notably in North Dakota. North Dakota now ranks third among the states in oil production.[iii]  Its proven reserves have increased 25-fold in 13 years, and are likely to grow much larger.  An identical increase from the rest of the United States would result in US reserves of 500 billion barrels, or almost twice those of Saudi Arabia.

What Does More Recent Data Look Like?

So, is this an historic anomaly? No. Let’s look at more recent data. In 1980, according to the Energy Information Administration, the United States had 31.3 billion barrels of proven oil reserves. However, between 1980 and 2010, the United States produced 77.8 billion barrels of oil and still had 20.7 billion barrels of oil reserves left. In other words, between 1980 and 2010, the United States produced 2.5 times the amount of oil as it has proven oil reserves in 1980.

Conventional and Unconventional Oil

Proven oil reserve data for the most part are comprised of conventional oil resources. Yet, today unconventional sources of oil are being produced. For example, Canada has proven reserves of conventional oil of only 5 billion barrels, but has 170 billion barrels of oil sands–a heavy oil whose production is based on unconventional technology –either by open pit mining or in-situ techniques, which reduce the viscosity of the oil by injecting steam and/or hot air into the oil sands. Canada’s proven oil reserves are officially set at 175 billion barrels, because it requested that oil sands be included in its proven oil reserve estimate. Canada now ranks third in the world in proven reserves, behind Saudi Arabia and Venezuela.[iv]


Proven oil reserves are not stagnant. They are continually changing as companies explore, find and produce oil.  Declaring that “the U.S. has only 2% of the world’s oil is akin to saying that the only gasoline we will have is that which is in our tanks.”  The president should know better, and if he does not, his Secretaries of Energy and Interior should tell him.

So, what can be done to increase our oil reserves?  First and foremost, the United States needs to open more federal lands and waters to oil leases. Currently, only about 3 percent of government property is leased for finding energy.  Once that is done, American ingenuity will take over to explore and produce those resources. ”According to a Gallup poll, an overwhelming number of consumers — 85% — say Obama and Congress should take “immediate” action to keep a lid on (gasoline) prices.”[v]

It is time our government stops misleading the American public and starts owning up to the reality of our energy situation – we are a nation rich in energy resources with poor policies that do not allow us to access them.

Exposing the 2 percent oil reserves mythInstitute for Energy Research | Institute for Energy Research.

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