Monthly Archives: September 2012
From Bloomberg Briefs:
“Policy choices made in the near-term will affect the economy for years to come. If not addressed, current debt and spending dynamics will probably lead to a reduced growth path, placing at risk expenditures on vital social programs and, over time, crowding out private sector borrowing that funds the gross private domestic investment necessary to boost productivity and living standards. Dollars spent on entitlements dwarf those spent on discretionary items such as education, and tower over net fixed business investment, which is partially responsible for greater productivity, business expansion and rising living standards. Periods with greater investment as a share of GDP are highly correlated with both faster economic growth and rising living standards. One risk to the U.S. economy is that rising entitlement spending will require the government to borrow from the finite amount of capital held by private savers, thus squeezing out private firms that need the capital to expand businesses and increase productivity.”
Who needs private business when you have infinite toner cartridge and politicians who need to be reelected with promises of, well, everything.
The Center for LNG praised a bipartisan group of 16 House Members who called for an expedited review process for applications to export liquefied natural gas (LNG).
The legislators – all representing districts in the western region of the United States – sent the letter to Steven Chu, Secretary of the U.S. Department of Energy (DOE), where all LNG export applications must be reviewed.
Led by Reps. Cory Gardner (R-Colo.) and Jim Matheson (D-Utah), the lawmakers noted that “Creating more opportunities to sell natural gas into global markets and access overseas customers could help the goals of increasing natural gas use and smooth out historical boom-bust cycles. Realizing sustainable natural gas prices will continue to stimulate the resurgence of U.S. manufacturing, power generation, chemical and agriculture sectors, as well as continue to keep costs low to heat our homes and fuel our nation’s transportation needs.”
The Center for LNG, a trade group representing the LNG industry, agreed with the lawmakers.
“Restarting the permitting process for LNG facilities would give the United States a unique opportunity to generate more public revenues, increase investment in the U.S. economy, create new jobs, and reduce our trade deficit,” said Center for LNG president Bill Cooper. “Promoting exports is a longstanding policy in the United States, including the President’s National Export Initiative, which is designed to create jobs by doubling U.S. exports by 2015.”
Yesterday’s letter follows a similar effort from earlier this summer, when a bipartisan group of 44 House lawmakers from Texas and Louisiana also wrote to DOE to encourage an expedited review of LNG facilities, bringing the total number of House Members supporting expedited approval to 82.
“This is yet another indication that Americans are ready to get back to work. Approving LNG export facilities would be a significant source of new jobs and will help re-grow our struggling economy,” Cooper added.
Three Democrats and 13 Republicans representing the states of Arizona, California, Colorado, Kansas, Nebraska, Nevada, New Mexico, Utah, and Wyoming all signed the letter.
TDW Offshore Services (TDW), a leading supplier of pipeline services and equipment, has successfully completed a subsea pipeline pressure isolation operation in the Gulf of Mexico. Carried out at a depth of 370 ft (113 m) against 870 psig, this isolation enabled the safe and effective tie-in of a piggable wye to the Mississippi Canyon Gas Pipeline, a 30-inch natural gas line running between the West Delta 143 platform – a hub facility for deepwater oil and gas production – and the Venice Gas Plant in Louisiana.
The isolation project utilized two remote-controlled 30-inch SmartPlug® dual module pressure isolation tools to isolate 45 miles of pipeline.
“The SmartPlug® isolation tool is certified to ‘Safety Class High’ in accordance with OS-F101 for Submarine Pipeline Systems and is uniquely suited for use in connection with diving operations,” says Bjørn-Olav Gilje, project manager for TDW.
Each tool was composed of two plug modules and two pigging modules. One of the tools provided double block isolation on the high pressure side of the tie-in location. The first module on the second tool provided a hydraulic locked barrier of the high pressure side for the divers installing the wye. The second module on the second tool was used to perform a leak test to verify integrity of the new wye after installation.
Following launch, TDW technicians aboard dive support vessel Norman Commander used the remotely-operated SmartTrack™ tracking and pressure monitoring system to continuously monitor the locations of the SmartPlug® tools as they traveled to their subsea set destinations. The SmartTrack™ system uses two-way, through-wall, electromagnetic communication between a transponder and a receiver to track tool progress. Once the tools were set, the isolation period was approximately two and a half weeks.
“TDW worked with the client and their contractors over several months to ensure that associated risks were evaluated and mitigated,” Gilje adds. “This thorough up-front planning resulted in a successful tie-in operation for our client. Working together achieved a result that we are proud to have been part of.”
- WWCS, DOF Subsea Conduct Subsea Services in US Gulf Of Mexico (mb50.wordpress.com)
- Wright’s Well Control Services conducts rigless and riserless subsea plug & abandonment without running pipe to the surface in 1,250′ WD in the Gulf of Mexico (prnewswire.com)
- UK: Helix Well Ops Charters Skandi Constructor from DOF Subsea (mb50.wordpress.com)
Seadrill has entered into a turnkey contract to build a new ultra-deepwater drillship at the Samsung yard in South Korea. The project value price is estimated to be around US$600 million (including project management, drilling and handling tools, spares, capitalized interest and operations preparations) with tail-heavy payment terms payable upon delivery, which is scheduled within the fourth quarter 2014.
Delivery is scheduled for the fourth quarter 2014. In addition, Seadrill has agreed a fixed price option to build a further drillship at the yard, with delivery in the first quarter 2015. With the current strong demand there is limited availability of rigs in 2014 and Seadrill believes it is likely that the option will be exercised and is currently discussing details of upgrades of that unit.
The drillship will be of the same design as the existing six drillships under construction at Samsung and will have a hook load capability of 1,250 tons and a water depth capacity of up to 12,000 feet targeting operations in areas such as the Gulf of Mexico, Brazil and West and East Africa. Also, these units will be outfitted with seven ram configuration of the blowout preventer (BOP) stack and with storing and handling capacity for a second BOP.
Yard costs are currently at very attractive levels. This together with the delivery time in 2014, the strength of the ultra-deepwater market and Seadrill’s proven track-record of taking delivery on time and on budget makes this into an investment which is likely to deliver an excellent return to our shareholders.
Seadrill’s construction program now totals 19 units, including 7 drillships, 2 harsh environment semi-submersibles, 5 tender rigs and 5 jack ups. In addition the Company has fixed priced options for three ultra-deepwater/harsh environment units.
The initial installments for the new drillship will be funded by liquidity from the recent US$1 billion bond offering.
Chairman of Seadrill Limited John Fredriksen says, “We have a unique environment where both daily rates and contract duration are increasing to new highs, while yard prices remain low due to the overcapacity in the shipyard industry. This presents an excellent investment opportunity under which we can continue to aggressively grow Seadrill. The new ordering has been evaluated up against several M&A and asset proposals but the Board has concluded that organic growth through contracting new buildings at attractive prices is likely to give higher long-term return to shareholders. The deepwater drilling industry is transforming from an exploration to a development industry. Such a transformation will trigger a significant increase in the need for the drilling of production wells in order to connect the fields that have been successfully explored in the recent years.”
Fredriksen continued: “Seadrill is best positioned within the drilling industry to meet this tightness. We have in total nine ultra-deep/ harsh environment units for delivery in 2013 – 2015 plus options for an additional three. Two of these units have already been employed on long-term contracts. We are currently in specific discussions regarding attractive long-term employment opportunities for a majority of the remaining firm units. Clarification around these fixtures should be expected in the months to come. The Board has in recent press releases expressed that they are confident that an attractive financing package can be arranged for the new building program. This situation has further improved in the recent months, driven by a well oversubscribed bank financing, good progress on the export financing side as well as the successful trading of the new US$1 billion five-year unsecured note. With a total order backlog in excess of US$20 billion which is likely to increase further in the months to come the Board is confident that the new ordering can be financed without raising additional equity and will contribute positively to future valuation as well as dividend capacity. Seadrill will continue to monitor opportunities in the new building market including the possibilities to declare the existing three options. The target is to continue to grow Seadrills organization, fleet and earnings potential in an optimal and dynamic way. The Board is increasingly excited about the strength of the market and the way Seadrill is exposed to this operationally and financially.”
- Pacific Drilling Extends Option to Build Eighth Drillship (South Korea) (worldmaritimenews.com)
- Ultra Deepwater Drilling Poised to Take Advantage of Supply Demand Imbalance (dailyfinance.com)
- Rolls-Royce to Power High Tech Drillships (maritime-executive.com)
- Seadrill Secures Contracts for Three Ultra-Deepwater Units in GoM (worldmaritimenews.com)
- It Seems That Seadrill Will be Buying Beers Today (gcaptain.com)
- SDRL – Seadrill Partners LLC Files for Initial Public Offering (sys-con.com)
This week the SubseaIQ team added 4 new projects and updated 25 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.
N. America – US Alaska
Sep 17, 2012 – After battling through federal regulatory issues and environmental lawsuits, Shell’s Chukchi Sea exploration drilling program has gotten off to a rocky start. Soon after spudding the first well, the Noble Discoverer (mid-water drillship) was forced to move off location for a short time due to an encroaching ice floe. The latest setback occurred when the containment dome – used to contain uncontrolled oil flowing from a subsea wellhead – was damaged during testing. Without an operational containment dome, the company will not be able drill into oil-bearing zones. However, Shell will still be able to drill the shallow top-hole sections of several exploration wells before the short drilling season comes to an end.
Project Details: Burger, SW Shoebill, Cracker Jack
Europe – North Sea
Sep 20, 2012 – Xcite Energy has successfully concluded the pre-production well test in the Bentley Phase 1A work program. The test was built around two horizontal well sections (9/3b-7 and 9/3b-7Z) that represented an excess of 4,200 feet of net reservoir. Approximately 147,000 barrels of Bentley crude were produced. Results confirmed the existence of a large aquifer that should provide long term pressure support during production. Even with the aquifer in place, the oil-water ratio was far better than expected and provides important information for modeling long term oil recovery from the field. Both well bores will be suspended and kept available for use in the next phase of development. Drilling and testing were carried out by the Rowan Norway (400′ ILC). Once the test equipment on the rig has been decommissioned the rig be demobilized from the field and released back to Rowan.
Project Details: Bentley
Sep 19, 2012 – The Norwegian Ministry of Petroleum and Energy introduced a policy of naming fields and discoveries after prominent individuals or events of national significance. The re-naming policy is an effort to parallel the importance of Norway’s offshore energy reserves with the contributions of people and events that shaped the nation. In this instance, the Draupne field is now the Ivar Aasen field. Aasen was a poet and linguist in the 1800s. He is credited with developing the Nynorsk (New Norwegian) language which aided in the modernization of the country.
Project Details: Edvard Grieg (Luno, Ivar Aasen) Project
Sep 19, 2012 – Premier Oil awarded a contract worth $24.3 million to Aberdeen-based energy consulting firm ADIL to provide people and systems for the execution phase of the Solan field in the UK North Sea. ADIL spent the previous two years providing similar services to the field’s former operator, Chrysaor, during the development phase. The contract will conclude once the field is brought into production, currently scheduled for 4Q 2014. ADIL personnel will oversee construction of the jacket and topsides as well as a 300,000 barrel subsea storage tank. Once brought online, Solan is expected to produce 40 million barrels of oil at an initial rate of 24,000 barrels per day.
Project Details: Solan
Sep 18, 2012 – Serica Energy announced a farm-out agreement has been reached with JX Nippon for UK North Sea Block 22/19c. At present, Serica holds a 100% interest in the block. Once the UK government signs off on the transaction, JX Nippon will be the operating partner with an 85% stake. As part of the agreement, JX Nippon will pay $250,000 to Serica and bear all future costs associated with the license.
Project Details: Oates
Sep 17, 2012 – Ithaca Energy announced that a hydraulic intervention to correct a production tubing blockage in well P1 has been performed with minor success. Gross production from the well is now between 700 and 800 bopd. P1, drilled in 2006, is the original appraisal well and was completed as a development well in 2011. A workover was contemplated by the Athena partners but it was determined that more value would be gained from producing the well in its current condition. The company did indicate that future attempts to further clear the blockage using facilities on the FPSO may be undertaken.
Project Details: Athena
Sep 14, 2012 – EnQuest will formally become operator of Blocks 9/2b and 9/2c with the completion of its acquisition of an additional 15 percent from First Oil. EnQuest’s total stake in Kraken is now 60 percent.
Project Details: Kraken
Sep 14, 2012 – The Norwegian Petroleum Directorate has approved Wintershall’s permit to drill exploration well 16/1-16 using the Bredford Dolphin (mid-water semisub). The well is located in 370 feet of water in PL457.
Project Details: Noor
Sep 19, 2012 – Chevron continues a successful run in the Greater Gorgon area offshore Western Australia with the announcement of positive results from the Satyr-2 exploration well. The company has confirmed that the well intercepted a net gas column of 128 feet. Satyr-2 was drilled to a depth of 12,454 feet by the Atwood Eagle (DW semisub) in permit WA-374-P. This marks Chevron’s fifteenth discovery in Australia since mid-2009. Chevron’s Gorgon natural gas project is the largest of almost a dozen terminals planned or under construction along the country’s coast.
Project Details: Greater Gorgon
Sep 18, 2012 – INPEX awarded a contract worth $273 million to Technip for work related to the Ichthys LNG Project in the Browse Basin, Western Australia. Starting immediately, Technip will provide services concerning the preparation and execution of offshore commissioning of the FPSO and central processing facility. Completion of the contract is expected in 4Q 2016 when first gas is scheduled to be delivered. This is the third Ichthys contract awarded to Technip this year. The other two include agreements for engineering and procurement services and for the supply of flexible piping.
Project Details: Ichthys
S. America – Other & Carib.
Sep 17, 2012 – Falkland Oil and Gas confirmed that their Loligo exploration well is a gas discovery. Drilling operations were carried out by the Leiv Eiriksson (UDW semisub). The well was drilled to a measured depth of 13,264 feet and intersected six-gas bearing Tertiary aged targets. Information obtained from the well will be used with existing seismic data to gain a better understanding of reservoir potential and distribution. The well will be plugged and abandoned but it is important to note that Loligo has proven a working hydrocarbon system in the northern part of the East Falkland Basin.
Project Details: Loligo
Africa – West
Sep 20, 2012 – Eni reports promising test results from the Sankofa East-1X well drilled off Ghana in the Offshore Cape Three Points block. The well was drilled to a total depth of 11,975 feet in 2,706 feet of water by the Transocean Marianas (DW semisub). Testing revealed 91 feet of gas and condensate pay as well as a gross oil column of 249 feet in Cretaceous sandstones. A production test of the oil-bearing zone delivered roughly 5,000 bopd; however, flow rates were constrained by surface infrastructure limitations. It is possible that the well will be suspended for future use in development operations. Eni plans to immediately drill other wells in the area to determine the size of the discovery and further evaluate the potential for commercial development.
Project Details: Sankofa
Sep 19, 2012 – Bowleven’s latest Etinde appraisal and development well offshore Cameroon is now underway. The IM-5 well is being drilled by the Atwood Aurora (350′ ILC) in block MLHP-7. The primary objective of the operation is to establish reservoir and fluid properties in the Middle Isongo sands. An extensive logging, testing and coring suite will be performed as well. The well has been designed in a manner that will allow for use as a future producer. A second well will be drilled on the permit, the location of which will be determined by results of the IM-5.
Project Details: Etinde
Ophir Continues EG Success
Sep 17, 2012 – Ophir Energy wrapped up a successful 2012 drilling campaign with a gas discovery in the Fortuna West-1 exploration well on Block R offshore Equatorial Guinea. The well was drilled to a measured depth of 10,426 feet by the Eirik Raude (UDW semisub). Gas was encountered in the primary and secondary targets. The Felix Prospect was also intercepted and testing indicated promising results for future appraisal. Fortuna West-1 is the last of three wells in the company’s 2012 Block R drilling program. Combined results of these wells have increased estimates of in-place contingent resources from 116 MMboe to 500 MMboe.
Asia – SouthEast
Sep 14, 2012 – The Pearl Energy-led joint venture has awarded Clough and TL Offshore the platform procurement construction installation and commissioning contract. Clough will be responsible for the procurement, construction and commissioning portion of the work while TL Offshore will be responsible for offshore transporation and installation. Work is expected to commence in September 2012. Completion is anticipated in early 2014.
Project Details: Manora
Sep 14, 2012 – The Pearl Energy-led joint venture has awarded Tanker Pacific Offshore Terminals the contract to carry out the conversion of the FSO to be used on the Manora field with work taking place in Singapore. Installation of the FSO is scheduled or early 2014.
Project Details: Manora
- Remote-controlled world record at Åsgard (mb50.wordpress.com)
Sept. 21, 2012, 1:04 p.m. EDT By Melodie Warner
Seadrill Partners LLC filed plans for an initial public offering estimated at up to $225 million.
The limited liability company was formed by Norwegian oil-services company Seadrill Ltd. (SDRL, SDRL.OS) to own, operate and acquire offshore drilling rigs.
Seadrill Partners said it will use the proceeds to buy from Seadrill Ltd. interests in Seadrill Operating LP and Seadrill Capricorn Holdings LLC, which own and operate Seadrill Partners’s offshore drilling rigs.
After the planned offering, Seadrill Partners said it will own a 30% stake in Seadrill Operating and a 51% stake in Seadrill Capricorn Holdings.
The company said its drilling rigs are under long-term contracts with major oil companies, such as Chevron Corp. (CVX), Total S.A. (TOT, FP.FR), BP PLC (BP, BP.LN) and Exxon Mobil Corp. (XOM), with an average remaining term of 3.1 years as of June 30, according to its regulatory filing.
Seadrill Partners said its profit rose 5.6% to $93.9 million as revenue increased 11% to $275.2 million for the six months ended June 30.
The company has applied to list its common units on the New York Stock Exchange under the symbol SDLP.
Seadrill Ltd. reported last month its second-quarter earnings fell 14% as higher operating expenses masked the company’s 13% rise in revenue.