Category Archives: Galapagos

USA-GOM: Galapagos Production Rates Above Forecast

Noble Energy, Inc.,independent energy company engaged in worldwide oil and gas exploration and production, has announced that all three wells at the Galapagos development in the deepwater Gulf of Mexico are now producing and at rates above the original forecast. The Company also announced that appraisal of the Deep Blue prospect will not continue at this time.

The Galapagos development includes three deepwater fields. The fields – Isabela, Santiago and Santa Cruz – are being produced using subsea equipment on the floor of the Gulf. A new production flowline loop has been added to carry output to the nearby Na Kika host facility, a BP-operated platform located roughly 140 miles southeast of New Orleans in 6,500 feet of water.

Production in the Galapagos area was initiated from the BP operated Isabela field in early June, followed by the Noble Energy operated fields of Santa Cruz and Santiago. The fields were individually flow tested and production increased over the course of several weeks. The Company’s net production of 13,000 barrels of oil per day and 8 million cubic feet of natural gas per day is about 30 percent greater than previously forecast. With the addition of Galapagos, Noble Energy’s deepwater Gulf of Mexico production has increased to approximately 30,000 barrels of oil equivalent per day, with over 80 percent oil.

David L. Stover, Noble Energy’s President and Chief Operating Officer, commented, “Galapagos is our second major project to start up in the past eight months and will provide significant production and cash flow growth. We continue to build on our strong track record of execution as this project came on-line less than three years after sanction. Galapagos is one of the first development projects to start up in the Gulf of Mexico after the moratorium, and our permit to drill Santiago was the first such permit received following the moratorium.”

At Deep Blue, although hydrocarbons were found in both the initial exploration well and subsequent sidetrack, the Company and its partners have decided not to proceed with additional appraisal activities at this time. The Deep Blue well was originally spud late 2009 and sidetrack operations were underway when the moratorium was announced. Noble Energy was required to suspend operations, and the rig working at that time was released. After the moratorium was lifted, another rig was certified under new regulatory requirements to finish the sidetrack. The Company expects to record $118 million of exploration expense in the second quarter related to the Deep Blue prospect.

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BP Starts Galapagos Development in U.S. GoM

Yesterday BP announced that on June 3, 2012 it began the initial start-up of the Galapagos development in the deepwater U.S. Gulf of Mexico, one of a series of new major upstream projects that the company expects to bring into production this year.

“The start-up of this project in the Gulf of Mexico is one of BP’s key operational milestones for 2012, one of six high-margin projects we expect to come on stream this year,” said Bob Dudley, BP group chief executive. “I expect that the operational progress we are now making will deliver increasing financial momentum for BP as we move into 2013 and 2014.”

The Galapagos development includes three deepwater fields and increases the capability of a key offshore production hub for BP. The fields – Isabela, Santiago and Santa Cruz – are being produced using subsea equipment on the floor of the Gulf. A new production flowline loop has been added to carry output to the nearby Na Kika host facility, a BP-operated platform located roughly 140 miles southeast of New Orleans in 6,500 feet of water.

The Na Kika facility, with a production capacity of 130,000 barrels of oil equivalent per day, has been modified to handle output from the three fields. Full ramp-up of the project is expected around the end of June.

“The Galapagos development marks another significant step forward for BP in the Gulf of Mexico, and reflects the potential we continue to see in this world-class basin, now and in the future,” said James Dupree, Regional President of BP’s U.S. Gulf of Mexico business.

BP’s overall interest in the three-block area that includes the fields comprising the Galapagos project is about 56 per cent. Noble Energy, Inc., Red Willow Offshore, LLC, and Houston Energy, L.P., are co-owners. BP is the operator of the Isabela field, while Noble Energy operates the Santiago and Santa Cruz fields.

The Galapagos development required the installation of new subsea infrastructure, production risers, topsides as well as other modifications.

BP expects to invest at least $4 billion a year on oil and gas development in the Gulf of Mexico over the next 10 years, following its strategy of focusing investment and future growth around the company’s strengths, including deepwater exploration and development.

“BP’s continuing investment in the Gulf of Mexico is yet another example of our commitment to the U.S. economy and energy security,” Dudley added. “This investment, along with our ongoing commitment to the Gulf Coast region, demonstrates the importance of the U.S. to BP’s long term strategy.”

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