Daily Archives: April 23, 2012

Atwood Osprey Rig Stays with Chevron in Australia Until 2017

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Chevron Australia Pty Ltd has decided to extend the contract for the semisubmersible rig Atwood Osprey for three more years

The Atwood Osprey, owned by the international drilling contractor Atwood Oceanics, started its first three year drilling services contract with Chevron on May 27, 2011 for operations offshore Australia inclusive of the Greater Gorgon field development project. With this contract extension, the Atwood Osprey is now committed through May 2017.

The operating day rate for the initial three year period remains unchanged. The operating day rate at the start of the extension period is estimated to be approximately $470,000, exclusive of the total cost escalation adjustments which occur during the initial term and will be additive to the operating day rate during the extension period. The contract provisions during the extension period provide for continued annual cost escalation adjustments, enhanced rig equipment maintenance and repair time allowances, and other adjustments to the initial contract’s terms and conditions.

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Russell: Obama’s Energy Strategy of Contradiction

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By Barry Russell
Special to Roll Call
April 23, 2012, Midnight

Right now, voters across the country are mobilizing around an issue that could determine who wins the 2012 presidential election: energy.

The rising cost of gasoline has influenced the American people to do a double-take on President Barack Obama’s overall energy policy. In light of this election-year scrutiny, it’s no surprise that Obama has tried to defend and define his administration’s energy policy.

But under the public’s watchful eye, the president is continually contradicting himself inside the Beltway and on the campaign trail. Obama calls to expedite infrastructure projects, but in the wake of rejecting the Keystone XL pipeline. Obama claims increased oil and natural gas production on his watch, but then follows up with accusations that oil companies are profiting at the expense of the American people. Obama repeatedly calls for an “all of the above” energy strategy, but then singles out the oil and natural gas industry for new regulations and targeted tax attacks.

Something doesn’t add up. To discover Obama’s real feelings and policies toward American-made energy, we must look to areas that the administration actually has jurisdiction over: public lands, federal agencies and his own calls for legislative action.

Responsible, common-sense regulations on development are a foundation of the oil and natural gas industry’s operations — and rightly so. Protecting the environment and developing our resources must go hand in hand. But right now, under the Obama administration, there are not two, not three, but 11 federal agencies seeking to regulate, study and reassess oil and natural gas production in the United States.

The Environmental Protection Agency, for its part, has been acting like an all-around bully; doing everything it can to smother the industry with one-size-fits-all regulations from Washington, D.C. It disregards the states’ impressive history of successful regulation of hydraulic fracturing. Also, the EPA has been using American tax dollars to conduct studies that distort scientific results to accuse the oil and natural gas industry of harming the environment. These studies have ignored the industry’s incredibly safe record and serve as a rallying cry for the president’s environmental base.

Obama’s State Department rejected the Keystone XL pipeline, which would transport oil from our neighbor Canada and alleviate the oil bottleneck that is causing problems for U.S. producers in Cushing, Okla., and refiners on the Gulf Coast.

And the American people are not amused. A recent Gallup poll revealed that Americans favor the Keystone XL pipeline by a ratio of 2-to-1. On the campaign trail recently, the president tried to backtrack, urging expedited work on the southern leg of Keystone. No matter that his administration has no jurisdiction on this issue: The southern portion of the pipeline could and would have continued without his approval.

Do his federal agencies’ brakes on development mean that Obama is fundamentally hostile to oil and natural gas as fuel sources? The president’s major rebuttal to this claim involves pointing to increased production under his administration. It’s true that the United States is experiencing an impressive increase in oil and natural gas development. But these huge gains are happening because of the advanced technologies U.S. producers utilize on private and state lands, where his federal agencies have limited jurisdiction.

On the other hand, Obama’s record on public lands — where his administration does have control — is far from stellar. Oil and natural gas production on public lands has decreased significantly under his watch. The Interior Department institutes duplicative and expensive regulations that make it impossible for many independent oil and natural gas producers, small American businesses that employ 12 people on average, to conduct business on public lands.

The president’s own punitive legislative proposals offer a stark contrast to his pro-development rhetoric. Obama repeatedly calls on Congress to repeal the “subsidies” that oil companies receive. However, these are neither subsidies nor government handouts. These are typical business deductions, such as labor and construction costs, which many industries have. These provisions, namely intangible drilling costs and percentage depletion, encourage new development of American energy. Eliminating them is a sure way to decrease energy supply and stunt job creation. Singling out the most productive, creative energy industry for targeted tax attacks certainly does not sound like an “all of the above” strategy for U.S. energy.

A recent poll revealed 68 percent of Americans disagree with the way Obama is handling gasoline prices. The public may be taking note of Obama’s energy policy contradictions. The 2012 election may rest upon the question: Can Obama have his energy cake and eat it, too?

Barry Russell is president and CEO of the Independent Petroleum Association of America.

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Norway: OTS Takes Delivery of CSV North Ocean 105, Begins 5 Year Charter

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Oceanteam Shipping ASA has announced that it’s new Lay Vessel, CSV North Ocean 105 which is jointly owned with J Ray McDermott (Norway) AS, has been delivered on time and has immediately commenced a five year time charter. The company’s fleet of CSVs now consists of four partially owned North Ocean Series concept vessels.

‘’We are very pleased with this successful delivery and the fact that the vessel starts to work for the Owners at once. The yard, McDermott and OTS have capitalized on our joint experience with this vessel series, says CEO of Oceanteam Shipping, Haico Halbesma’’

The five year time charter is with Eastern Marine Services Inc. a 100% subsidiary of McDermott. The vessel has been built and delivered by Metalships in Vigo, Spain.

The North Ocean 105 is the fifth vessel to be delivered with this concept developed by Oceanteam Shipping. The North Ocean series is one of the most advanced, able and successful, high-end Construction Support Vessel series to date. The series’ proven quality for advanced deepwater operations under the most demanding and harsh conditions has set a new industry standard.

Lay Vessel North Ocean 105 is the second vessel within the McDermott fleet of the North Ocean Series which is jointly owned.

CSV North Ocean 102, with its 7,000 tons horizontal lay system, has been working successfully on numerous McDermott projects since August 2010. Before delivery to McDermott the vesselwith successfully performed the Statoil Gjoia Power Cable installation and the BritNed interconnector powercable for ABB.

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Facts: Lay Vessel North Ocean 105

Lay Vessel North Ocean 105 will be mobilized further by McDermott with an advanced 440 tons top tension vertical reel system for rigid and flexible pipelay for depths of up to 3,000 meters. The reel pay load will be a maximum of 2,975 tons in combination with a pipelay tower with 440 tons tensioner. In addition comes two A&R winch systems with capacity of 496 tons and 165 tons respectively.

The vessel has a length (LOA) of 145 meters, a beam of 27 meters, and has over 10,000 tons of deadweight with two portside AHC cranes installed of 440 tons and 110 tons for subsea lifts and construction support.

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New York Times Finally Notices Obama’s Unilateral Abuse of Power

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April 23, 2012 at 3:15 pm
by Mike Brownfield

Today’s New York Times offers a stunning revelation for anyone who hasn’t been following the news out of Washington for the past three years: President Barack Obama is bypassing Congress and using his executive authority to unilaterally implement his policies of choice, irrespective of the will of the people.

The Times cites an episode last fall when the president declared in a White House meeting “that the administration needed to more aggressively use executive power to govern in the face of Congressional obstructionism.” And so was born the president’s “We Can’t Wait” slogan, which has become a mantra for the Obama Administration’s unilateral form of governance. The Times overlooks the fact that the president’s “new” slogan had been conceived and implemented well before last fall.

After the November 2010 elections, the president — who was suddenly facing a Republican majority in the House after having enjoyed two years of Democrat rule — now had no choice but to compromise with the opposition party if he wanted to get things done legislatively. The thing is, the president didn’t want to compromise — he wanted to enact his agenda. And so he admitted quite plainly that where he could not legislate, he would regulate and do an end run around Congress. In a press conference on November 3, 2010, he discussed how he would apply that method to energy policy:

So I think when it comes to something like energy, what we’re probably going to have to do is say here are some areas where there’s just too much disagreement between Democrats and Republicans, we can’t get this done right now, but let’s not wait.  Let’s go ahead and start making some progress on the things that we do agree on, and we can continue to have a strong and healthy debate about those areas where we don’t.

But energy policy isn’t the only way that President Obama has penned legislation with his own hand instead of choosing the constitutional route — bills getting passed by Congress, arriving at his desk, and then signed into law. On labor laws, immigration, marijuana use, voting rights, the Defense of Marriage Act, regulating the Internet, and making appointments, this president has circumvented the legislative branch via administrative fiat whenever his agenda stalls.

Even when the president legislated, though, he abjured the will of the people. Case in point: Obamacare. Despite pledging that his administration would be the most transparent in history, President Obama hatched Obamacare behind closed doors without the disinfecting light of the media, let alone input from the opposition party. Even worse, special interest groups like Big Labor got a seat at the table while the rest of the country got scraps of information after the main course was over.

Now the president is wearing his “We Can’t Wait” slogan as a badge of honor — and it’s so obvious that even the dean of the mainstream media can’t ignore it.

Posted in Featured, Ongoing Priorities

Israel’s Key Energy Provider, Egypt, Cuts Off All Natural Gas Supplies

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Submitted by Tyler Durden on 04/22/2012 15:49 –0400

Two months ago, we warned that while the world had decided to blissfully move on from last year’s topic #1, the MENA revolutions, and specifically the massive power vacuum left in their wake, things in the region were far from fixed. Quite the contrary, and as we added back then “it is very likely that the Mediterranean region, flanked on one side by the broke European countries of Greece, Italy, Spain (and implicitly Portugal), and on the other by the unstable powder keg of post-revolutionary Libya and Egypt, will likely become quite active yet again. Only this time, in addition to social and economic upheavals, a religious flavor may also be added to the mix”. Yet nobody cared as after a year of daily videos showing Molotov Cocktails dropping like flies, people had simply gotten habituated and needed some other source of excitement. Nobody cared also when a week ago Art Cashin warned that the hidden geopolitcal risk is not Spain but Egypt. Today, Egypt just reminded at least one country why perhaps caution about the instability caused by having a military in charge of the most populous Arabic country and the one boasting “the Canal”, should have been heeded after Egypt just announced that it is cutting off its natural gas supplies to Israel, which just so happens relies on Egypt for 40% of its energy needs.

From Reuters:

Egypt’s energy companies have terminated a long-term deal to supply Israel with gas after the cross-border pipeline sustained months of sabotage since a revolt last year, a stakeholder in the deal said on Sunday.

Ampal-American Israel Corporation, a partner in the East Mediterreanean Gas Company (EMG), which operates the pipeline, said the Egyptian companies involved had notified EMG they were “terminating the gas and purchase agreement”.

And judging by the sound and fury emanating from Israel the move was hardly expected:

The company said in a statement that the Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding Company had notified them of the decision, adding that “EMG considers the termination attempt unlawful and in bad faith, and consequently demanded its withdrawal”.

It said EMG, Ampal, and EMG’s other international shareholders were “considering their options and legal remedies as well as approaching the various governments”.

Before the sabotage, Egypt supplied about 40 percent of Israel’s natural gas, which is the country’s main energy source.

Suddenly Israel may have bigger things to worry about that whether or not to leak its Iran invasion plas on national TV:

Israeli officials have said the country was at risk of facing summer power outages due to energy shortages.

Companies invested in the Israeli-Egyptian venture have taken a hit from numerous explosions of the cross-border pipeline and are seeking compensation from the Egyptian government of billions of dollars.

Ampal and two other companies have sought $8 billion in damages from Egypt for not safeguarding their investment.

Furthermore, if the Egyptian move is indeed an escalation in strategic alliance shifts in the region, it could have truly huge implications:

The Egyptian decision is a potential blow to the country’s ties with Israel, already tested by the toppling of Israeli ally President Hosni Mubarak a year ago.

Egypt was the first of two Arab countries to sign a peace trety with Israel, in 1979, followed by Jordan in 1994.a

Has the country’s endless warmongering calls for a preemptive war against Iran backfired epically? We won’t know for a while, but what we do know is that any government left in the power of military elites, is, how should we say it, unstable… for the simple reason that a military regime tends to require war to remind people why it is in charge. And the Egyptian “transitional” military government appears pretty much set to become permanent. Again from Reuters:

Ex-foreign minister Amr Moussa, a leading contender for Egypt’s presidency, said on Sunday he would give the military a voice in key policies via a national security council, a move to reassure ruling generals about their status after a power transfer.

Moussa, a self-described liberal nationalist whose main election rivals are Islamists, also said Egypt needed a president with lobbying skills to work effectively with the Islamist-dominated parliament and other institutions after decades of autocratic government.

Which means add one more election to the already surging roster of short-term catalysts now including France, Greece, Germany and, as of yesterday, the Netherlands:

Egypt’s presidential vote that starts on May 23-24 will mark the final stage of a transition to civilian rule from generals who took charge after Hosni Mubarak was ousted last year.

Unfortunately for Israel, either outcome will likely be a choice between a rock and a hard place, as the country appears to be rapidly alienating its one core catalytic long-term ally in the region.

Moussa, 75, said the national security council, to be chaired by the president, would include senior cabinet ministers plus top military officers. It would have a broad national security brief, he told a news conference.

“It has to consider all issues pertaining to national security and not only issues of defence or war, etc, but issues like water, issues like relations with neighbours,” said Moussa, a former head of the Arab League.

“(The council) will be a power house on those issues of major priority for the national life,” he added.

Other candidates, including one Islamist, have made similar suggestions but Moussa’s proposal and his plans as a whole are more detailed than most.

The army has said it will hand over power and return to barracks by July 1, leaving the new president in charge.

But various comments from army officials, usually in private, or from the military-appointed cabinet have indicated that the military wants a longer term role in protecting broad interests that range from businesses to national security, and wants to guide state affairs that could impact them.

The only question Israel may want to answer now is whether it wants to get cozy with Russia, whose nat gas it may suddenly be very, very attractive. And for that to happen, it means a huge softening in its anti-Iran tone, which in turn will have a huge impact on regional geopolitics, and specifically the risk of war in Iran, and thus the price of Brent. All of this, of course assumes, Israel does not immediately retaliate against Egypt, recently a big recipient of US aid, not to mention tear gas, and start a pre-emptive two front pre-war…

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