Daily Archives: September 14, 2012
Worldwide Field Development News Sep 8 – Sep 14, 2012
This week the SubseaIQ team added 3 new projects and updated 17 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.
Asia – SouthEast
Torquing the Bit for Gurame Appraisal
Sep 13, 2012 – The Gurame SE-1X well is expected to spud towards the end of September, according to MEO Australia. Success of the appraisal well could lead to early development of the Gurame oil and gas field situated offshore northern Sumatra in the Seruway PSC. The well was identified via 3D seismic as the lowest risk drill-ready candidate with the highest potential for commercial development. Drilling will be undertaken by the Hercules 208 (200′ MLC). Two attractive targets in the well, the Baong and Belumai reservoirs, are expected to be naturally fractured and gas bearing. These attributes should improve the possibility of achieving commercial flow rates. MOE maintains a 100% interest in Seruway.
Project Details: Gurame
Lundin Announces Third Gas Discovery
Sep 12, 2012 – The Berangan-1 well has proved to be Lundin Petroleum‘s third gas discovery in block SB303 offshore Malaysia. The well was drilled in 229 feet of water to a total depth of 5,607 feet by the West Courageous (350’ ILC). Data acquired from the well indicates a 541 foot gross continuous gas column in mid-Miocene sands. While Berangan-1 is the third gas discovery in SB303, it is the fourth in the contract area. Each of the 4 gas discovery lies within a 6 mile radius.
Project Details: Berangan
Sep 11, 2012 – Otto Energy has approved the Final Investment Decision for Phase II of the Galoc field. Total project cost will be $188 million. Based on its working interest in the project, Otto will be funding 33 percent of the cost, or $62 million. The scope of work for Phase II includes drilling two subsea wells, tying back the wells to the existing FPSO and installing a second production riser and control umbilical. Both wells are expected to commence production during the second half of 2013. The two new Phase II wells will increase field production rates to 12,000 bopd from the current rate of 5,600 bopd.
Project Details: Galoc
Europe – North Sea
Sep 13, 2012 – BP has announced it reached an agreement to sell its 18.36% stake in Draugen Field in the Norwegian Sea to Norske Shell for $240 million. The deal, subject to regulatory approval, should be completed by the end of the year. BP’s net production from the Shell-operated Draugen field averages 6,000 barrels per day. Since 2010, BP has entered into agreements to sell assets valued at $33 billion. In an effort to focus more on growth opportunities and its core business strengths BP expects to divest $38 billion in assets between 2010 and 2013.
Project Details: Draugen
Providence Resources Confirms Plans for Dunquin Prospect
Sep 13, 2012 – Providence Resources has been informed by ExxonMobil that a letter of intent has been signed for the use of Ocean Rig’s Eirik Raude (UDW semisub). The rig will be used to drill the Dunquin prospect located in Frontier Exploration Licence 3/04 offshore Ireland. Program duration is expected to take up to 6 months and will commence in the first quarter of 2013, pending corporate and co-venture contract approvals. Partners in the exploration license include operator ExxonMobile (27.5%), Eni (27.5%), Repsol (25%), Providence Resources (16%) and Sosina Exploration (4%).
Project Details: Dunquin Project
Exploration Well Spuds at Geite
Sep 12, 2012 – JV partner Bridge Energy has announced the start of operations at exploration well 7/11-13 on the Norwegian continental shelf. The well is targeting the Triassic reservoir Geite prospect which is located 19 miles (30 kilometers) west of the Ula field. The Maersk Guardian (350′ ILC) is drilling the well and is expected to be on location for a minimum of 80 days.
Project Details: Geite
N. America – US Alaska
Shell Starts Drilling in Chukchi Sea
Sep 12, 2012 – Shell’s much anticipated Chukchi Sea drilling campaign is underway marking the first attempt in 20 years to explore offshore U.S. Arctic petroleum resources. Currently, the Noble Discoverer (mid-water drillship) is being used to drill the mud line cellar and top-hole sections of the first well. This is expected to take two weeks, after which the Discoverer will either continue drilling the Burger prospect or will move to another location to drill the top-hole section. Part of that decision will rest on whether or not the company is able to obtain a permit to drill past the surface sections into the oil bearing portion of the well. Shell has plans to drill three wells in the Chukchi Sea and two wells in the Beaufort Sea if the weather cooperates.
Project Details: Burger, SW Shoebill, Cracker Jack
Africa – Other
Sep 11, 2012 – Africa-focused Tullow Oil reported Monday that the Mbawa-1 exploration well, currently being drilled by Apache Corporation offshore Kenya, has encountered gas in its shallowest objective. Mbawa-1, located in the L8 license, has so far been drilled to a depth of 8,375 feet and it has encountered approximately 170 feet of net gas pay in porous Cretaceous sandstones. The Deepsea Metro I (UDW Drillship) is now drilling the well to a total depth of 10,745 feet. Apache is the operator of Block L8 with a 50-percent interest. Tullow holds a 15-percent interest.
Project Details: Mbawa
Black Sea
Beach Gains 30% of Est Cobalcescu
Sep 12, 2012 – Melrose Resources has agreed to farm-out 30% of its equity in the Est Cobalcescu exploration concession in the Black Sea to Beach Petroleum. Once the transaction is completed, Melrose will retain operatorship of the concession. Terms dictate that Beach will pay its proportionate share of past costs and cover Melrose’s share of the recently completed seismic survey.
Africa – West
Partners Reprocessing Seismic Data for Aje
Sep 13, 2012 – The joint venture partners for Aje, led by YFP, are reprocessing seismic data related to the Aje discovery with a focus on the Cenomanian reservoir. The joint venture is mulling the potential for early oil development as the technical review could lead to an increase in Cenomanian oil volumes. An appraisal well may be drilled in 2013 targeting the reservoir.
Project Details: Aje
N. America – US GOM
Petrobras Turns on the Taps at Chinook
Sep 13, 2012 – Petrobras has started production at its Chinook field in the U.S. Gulf of Mexico. The Chinook #4 well was drilled and completed in Lower Tertiary reservoirs. Production from Chinook is processed by the BW Pioneer – the first FPSO to operate in U.S. waters.
Project Details: The Greater Chinook Area
Plains Buys Shell’s Stake in Holstein
Sep 12, 2012 – It has been announced that Plains Exploration & Production has agreed to buy Shell’s 50% working interest in the Holstein Field for approximately $560 million. The transaction is effective October 2012 and should close by the end of the year. Holstein, located in the U.S. Gulf of Mexico, began producing in December 2004 and is facilitated by a spar platform anchored in 4,400 feet of water. Average net production at the field is 7,400 boepd. The remaining 50% interest in the field is held by BP.
Project Details: Holstein
S. America – Brazil
Canario Spud Expected in Next Few Weeks
Sep 13, 2012 – Vanco is preparing to move the GSF Arctic I (mid-water semisub) to drill its Canario prospect on BM-S-63. This is the second well in their three-well program offshore Brazil. Drilling is expected to commence in approximately two weeks.
Project Details: Canario
Sep 13, 2012 – Vanco Energy’s Sabia well reached a depth of 13,779 feet when a decision was made to stop drilling short of the proposed depth of 14,717 feet. Based on current well data, the discovered volumes are at the low end of the pre-drill range estimate. While the well encountered an active petroleum system, the commerciality of the discovery cannot be firmly made at this time. The information obtained from the well is likely to have a positive impact on the next two prospects to be drilled – Canario and Jandaia.
Project Details: Sabia
First Production at Baleia Azul
Sep 12, 2012 – Petrobras has announced the start of oil production at the Baleia Azul presalt field in the offshore Camps Basin. First oil from the field is being pumped aboard the Cidade de Anchieta FPSO. The Cidade de Anchieta is one of two new production systems that Petrobras will put into operation in 2012. Initial production at Baleia Azul is a good sign for Petrobras whose oil production has taken a hit this year due to maintenance and unexpected shutdowns. The company has also announced plans to bring Bauna and Piracaba fields online in October. Petrobras holds a 100% stake in the fields.
Project Details: Espadarte
Related articles
- Shell Starts Drilling Offshore Alaska (247wallst.com)
- BP Divests a Number of GoM Assets for $5.55 Bln (mb50.wordpress.com)
Fed Up: Bernanke Declares War On The Poor
September 14, 2012
This week, we saw both the European Central Bank and the Federal Reserve deliver massive amounts of stimulus to the markets.
The ECB is now backed by the 500 billion euro European Stability Mechanism facility, which has been ratified by the German parliament. This is a game-changer for Europe, as now it is finally moving toward a federalist system, similar to the one in the United States. This measure has been successful in bringing down the bond yields for Spain, Italy and Ireland to a very manageable level. And it is likely that those central banks might not even need to tap the ESM.
The big surprise this week, however, came from the Federal Reserve.
The Fed has decided to go all-out in fueling the next massive asset bubbles through its QE3 bazooka. The Fed announced plans to buy $40 billion worth of mortgage securities per month on an open-ended basis, while continuing to reinvest its income from the securities purchased during QE1 and QE2.
The following statement from the Fed shows its clear intent to support its mandate of full employment. But I fail to see how it will manage to do that “in the context of price stability” while creating asset price inflation through unabashed QE programs.
If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.
This new move by the Fed is unleashing massive amounts of money into the risk assets. Markets will now believe that, between the ECB and the Fed, all tail risks to the markets have gone.
In other words, this could mean that all the money that was hiding in the safety of U.S. Treasuries will now leave the Treasury markets and flow into equities and commodities.
If so, I would not be surprised to see a parabolic move into year-end in both gold and equities that could take the S&P 500 to 1,650 and gold to $2,000 per troy ounce by year-end.
Now here is the dangerous side to this equation. This rally will also lead oil and grains to new highs, which will results in higher gas prices at the pump and food prices at the grocery store. While employment and wages are still low, this will hurt the working class.
This massive and irresponsible Fed stimulus package by Ben Bernanke & Co. will make the rich richer by fueling their asset portfolios and bringing loads of misery to the poor, who will find it harder to make ends meet.
Besides the poor, this latest move also declares war on the retirees or those who subsist on fixed income returns from bonds. With the Fed’s monetary policy stuck at zero for another three years at least and more Federal money creating artificial demand for fixed income assets, yields will not rise for quite a while. This means that the coupons on newly issued government and agency bonds will be stuck at below inflation rates.
Another debilitating aspect of the latest round of QE is that by removing coupon generating bonds from the monetary system, it reduces the amount of money in the economy, thus reducing aggregate demand.
In summary, QE will reduce net savings of U.S. dollar holders and increase paper wealth in terms of higher equity market valuations.
While the initial reaction of the markets has been to sell the U.S. dollar, fewer U.S. dollars as a result of QE will result in the dollar eventually rallying hard, especially against the EUR. My target will be around 1.3500 before EUR/USD starts heading back down towards parity.
Related articles
- In A Sudden Twist, A New Group Of Economists Are Blaming Bernanke For The Great Depression (businessinsider.com)
- The Unintended Consequences Of QE Infinity (businessinsider.com)
- The Fed Declares War (on the poor, retirees, and the middle class) (conservativeread.com)
- The Fed’s Best Rationale for QE3 (bloomberg.com)
- UNLIMITED QE?! – Here’s The Controversial New Move The Fed Could Pull Today (businessinsider.com)
- Volcker Appears to Dislike QE 3 (dailycapitalist.com)
- (QE 1)+(QE 2) +(QE 3) = ??? Do Three Negatives Make A Positive? (conservativesonfire.wordpress.com)
Malaysia Aims to Become LNG Trading Hub through New $1.3B Terminal
Malaysia is aiming to become Asia’s liquefied natural gas (LNG) trading hub by 2020 with the establishment of a $1.3 billion LNG terminal in the Pengerang Integrated Petroleum Complex (PIPC), the country’s Prime Minister Najib Razak said in a statement Thursday.
The LNG terminal – also known as the Pengerang Independent Deepwater Petroleum Terminal (PIDPT) – will be developed by the Johor state government, Netherland’s Royal Vopak and Malaysia’s Dialog Group.
PIDPT – which will be constructed over two phases – is designed to have a total storage capacity of five million cubic meters. The terminal will be used for storage, loading and regasification of LNG, both for trading and domestic use. The first construction phase of PIDPT has already started, and is scheduled for completion by 1Q 2014.
“This will be the first independent LNG trading terminal in Asia, allowing multiple LNG users to store and trade the product. It will spur the growth of the [petroleum] industry, and help establish Malaysia as Asia’s LNG trading hub,” Razak said.
PIPC will also house Petronas’ new $20 billion refinery and petrochemical integrated project. The project – scheduled to be commissioned by 2016 – will be able to produce 300,000 barrels per day of refined products.
Malaysia’s PIPC has been touted as a potential strong competitor to Singapore’s Jurong Island – an artificial island located to the southwest of the main island of Singapore, off Jurong Industrial Estate. Singapore is, at present, the Asian price discovery center and trading hub for oil products due to its significant oil storage and trading infrastructure in Jurong Island. The island which is home to oil and gas companies – such as ExxonMobil, Shell, BP, BASF, Celanese, Mitsui Chemicals – sees up to 1.3 million barrels of crude processed each day.
Singapore is also aggressively developing its oil and gas storage infrastructure. The island-city, through the development of the Jurong Rock Cavern (JRC) project, will create an additional 1.47 million cubic meters of oil storage space by 2013. JRC is the first underground rock cavern for oil storage in Singapore and Southeast Asia. Construction work on JRC started in February 2007.
Related articles
- Malaysia ‘wants to be Asia’s hub’ (todayonline.com)
- BG Group inks pipeline deal for LNG terminal (calgaryherald.com)
- Shell to Build Kitimat LNG Terminal Despite China Investment (mb50.wordpress.com)
- U.S. Expected to Approve Expanded LNG Exports to Japan (mb50.wordpress.com)
- USA: Golden Pass Files with DOE to Export LNG (mb50.wordpress.com)
EIA: Gulf Coast Plants Recovering from Hurricane Disruptions (USA)
In response to Hurricane Isaac, EIA invoked its emergency-activation survey Form EIA-757B to collect daily data on the status of natural gas processing plant operations.
The survey, completed Friday, September 7, showed that Hurricane Isaac caused considerable disruption to processing infrastructure, although it had a negligible effect on natural gas prices because of ample onshore production and surplus storage.
The last time EIA invoked Form EIA-757B was for Hurricane Ike in September and October 2008. Hurricane Isaac made landfall on the evening of August 28, 2012, and ultimately disrupted natural gas processing operations for more than 10 of the 13.5 billion cubic feet (Bcf) per day of total processing capacity in the affected area. The survey captured plants with capacities greater than 100 million cubic feet per day.
The bar chart shows five items:
- Operational capacity (green): Sum of capacity of natural gas processing plants in the path of Isaac that was operating at normal levels
- Reduced capacity (yellow): Capacity that was processing gas at a reduced rate relative to pre-Isaac levels
- Ready to resume capacity (orange): Capacity that was able to process natural gas but was not currently receiving adequate volumes of gas from upstream to justify starting up the plant, or did not have a downstream delivery point able to accept its products
- Shut-in capacity (red): Capacity that was unable to process gas because of damaged plant infrastructure or power outages
- Maintenance capacity (brown): Capacity that was shut down for maintenance because of reasons unrelated to Isaac
Data collected on this survey are compiled with other data and used to provide critical information on the status of energy infrastructure to policy makers, emergency response teams, media, individuals, and businesses in the U.S. Department of Energy’s Situation Report.
Just prior to Isaac making landfall, there were 25 natural gas processing plants in the affected area that were not undergoing maintenance, accounting for 12.6 billion cubic feet per day of available processing capacity. However, widespread power outages (affecting nearly 890,000 customers in Louisiana), reduced gas flows, and the potential for flooding reduced or curtailed operations at many of these plants. Plants most commonly attributed closures to a lack of upstream supply, although a few also cited damage to downstream infrastructure that would receive their dry gas or their natural gas liquids products.
Processing facilities play a key role in the overall natural gas supply chain because they purify and “dry out” raw natural gas from producing wells. This process results in pipeline-quality natural gas for delivery to end-users and a mix of natural gas liquids products to be separated by fractionators.
The Department of Interior’s Bureau of Safety and Environmental Enforcement’s final update on the effects of Isaac on offshore oil and natural gas operations, released on September 11, 2012, indicated that less than 5% of Gulf of Mexico oil and natural gas production remained shut in.
The Federal Gulf of Mexico has accounted for a progressively smaller share of U.S. natural gas production in recent years. This is because of steadily declining offshore production volumes in the Gulf, combined with growth of shale gas production in various onshore basins and improved pipeline infrastructure to deliver that gas to market.
In 2000, Federal GOM gross natural gas production accounted for more than 20% of total U.S. gross natural gas production; in 2011, Federal GOM represented only 6% of total U.S. gross natural gas production. As a result of these historically low levels of offshore production, increases in onshore production, and strong natural gas storage stocks, Isaac-related shut ins have had little effect on natural gas prices or on gas supply for areas outside the path of the hurricane.
EIA: Gulf Coast Plants Recovering from Hurricane Disruptions (USA) LNG World News.
Continents of the World
Mb50's "Liquid Mud" Rant 