Offshore oil and gas operators in the Gulf of Mexico continue to restore production following Tropical Storm Isaac. The Bureau of Safety and Environmental Enforcement (BSEE) Hurricane Response Team will continue to work with offshore operators and other state and federal agencies until operations return to normal.
Personnel remain evacuated on a total of 10 production platforms, equivalent to 1.68 percent of the 596 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced.
Personnel remain evacuated from one rig, equivalent to 1.32 percent of the 76 rigs currently operating in the Gulf. Rigs can include several types of self-contained offshore drilling facilities including jackup rigs, submersibles and semisubmersibles.
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A deckhand prepares to secure a boat Friday at Port Fourchon. The port received minimal damage from Hurricane Isaac, the facility’s director says. Abby Tabor/Staff
Xerxes A. Wilson
PORT FOURCHON — Hurricane Isaac could have been worse at this hub for boats, rigs and manpower that serve most of the Gulf of Mexico’s oilfield.
The port shut down Monday as a mandatory evacuation was ordered in advance of the storm. Isaac dealt a direct hit to the port early Wednesday, but the facility reopened two days later, emerging with what officials describe as minor damage.
Electricity was still out Sunday, but Director Chett Chiasson said the docks, supply yards and other facilities buzzed with activity.
“Our biggest concern was the possibility of channel restrictions and damages to facilities where we would not be able to operate efficiently,” he said, “but that doesn’t seem to have happened.”
Getting the port running was key to allow Gulf oil production to continue, he said.
As Isaac hit, the Federal Bureau of Safety and Environmental Enforcement estimated that 509 of the 596 oil-production platforms and 50 of the 76 drilling rigs the Gulf had been evacuated. By Sunday, workers remain evacuated from 131 platforms, 22 percent, and 18 rigs, 23 percent. About 71 percent of Gulf oil production and 55 percent of natural-gas production remained halted Sunday.
Through the weekend, massive oceangoing vessels could be seen navigating the port’s channels as gulf oil production resumes.
The port serves as a staging area for half the drilling rigs in the Gulf and production of about 20 percent of the nation’s oil supply, Chiasson said. Supplies, equipment and rig infrastructure are typically brought into the port by truck along La. 1 then loaded onto towering vessels before being transported to the Gulf.
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Gulf Locals and Energy Experts Express Concern Over Decreased Gulf of Mexico Offshore Drilling Activity on Jobs, Economy
WASHINGTON, D.C., March 8, 2012 – Today, the Subcommittee on Energy and Mineral Resources held an oversight hearing on the Fiscal Year 2013 budget for the Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE). During the hearing, Committee Members heard testimony from Gulf of Mexico business leaders and energy experts who expressed deep concern over the slowdown in offshore permitting that has negatively impacted Gulf businesses and local economies.
“Production in the Gulf of Mexico is essential to our nation’s energy security – accounting for 29 percent of total U.S. crude production and 12 percent of total U.S. natural gas production. The thousands of businesses throughout the Gulf and nationwide that support this industry still struggle to stay afloat as a result of President Obama’s moratorium and the subsequent permitorium,” said Subcommittee Chairman Lamborn (CO-05). “We will hear from some of these stakeholders in the Gulf of Mexico, as well as review an analysis that shows that the pace of permitting is still well below historical averages.”
Historically low permitting has caused unemployment, economic instability and businesses to leave the Gulf of Mexico.
James Adams, President and CEO of the Offshore Marine Service Association (OMSA), which represents more than 100 firms that operate marine service vessels in the Gulf of Mexico, spoke to how devastating the permitting slowdown has been. “The economic impacts of this permit slow-down or de facto moratorium are diverse and farreaching, affecting individuals and businesses in various industries across the Gulf Coast…businesses are indeed laying off workers, reducing hours and salaries, and limiting new hires as a result of the permit slow-down.” Adams also mentioned the reoccurring theme of businesses moving overseas, “and postponing local expansion puts the regional economy on insecure ground, and the loss of businesses in the oil and gas industry to international markets has potential negative effects on the national economy.”
Brady Como, Ecxecutive Vice President of Delmar Systems, a leading supplier of offshore services in the Gulf, testified that slow permitting activity, “has not only had an impact upon our employees that were laid off, but also has been the driving force for the percentage of our international business outside the Gulf of Mexico more than doubling during that time.” To stay in business, his company has been forced to follow, “rigs leaving the gulf all over the world, from Brazil and Australia, to Trinidad, West Africa and the Mediterranean.” Como reminded Members that, “for every drilling rig that leaves, 200 jobs go with it. That impact is even greater when indirect jobs are considered.”
Benjamin Salsbury, Senior Energy Policy Analyst at SVP FBR capital Markets, confirmed that, “there are just 25 Mobile Offshore Drilling Units or ‘floaters’ and 15 platforms drilling. That is 12% fewer floaters than were operating before the Macondo spill despite crude oil prices more than 25% higher.” Salsbury continued to reiterate what local Gulf businesses already know, “there continues to be a permitting constraint on Deepwater Gulf of Mexico drilling activity.”
A study put forward by Greater New Orleans, Inc. estimates that of the Gulf businesses they surveyed:
- 41% said they were not making a profit;
- 50% said they have laid of employees as a result of the moratorium; and
- 82% said they have lost personal savings as a result of the permit slowdown.
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By John Konrad On January 10, 2012
To address this question, personnel from the U.S. Coast Guard and the Bureau of Safety and Environmental Enforcement (BSEE) completed a review today of the offshore oil rig Scarabeo 9 following an invitation from the vessel’s operator, Repsol. While aboard the Scarabeo 9, personnel reviewed vessel construction, drilling equipment, and safety systems in anticipation of the rig’s upcoming drilling operations in Cuba’s exclusive economic zone in the coming months.
According to the Coast Guard, the review is “consistent with U.S. efforts to minimize the possibility of a major oil spill, which would hurt U.S. economic and environmental interests”. While US regulators exercise no legal or regulatory authority over the rig, the review compared the vessel with applicable international safety and security standards as well as U.S. standards for drilling units operating in the U.S. Outer Continental Shelf. U.S. personnel found the vessel to generally comply with existing international and U.S. standards by which Repsol has pledged to abide.
In anticipation of an increase in drilling activities in the Caribbean Basin and Gulf of Mexico, the United States is participating in multilateral discussions with the Cuba as well as other countries nearby including Bahamas, Jamaica and Mexico on issues including, drilling safety and oil spill preparedness. The Coast Guard views the cooperation as providing valuable information on each country’s spill response plans and capabilities. The Coast Guard is also working to update contingency plans for spills on international waters that could potentially affect U.S. waters and coastline.
In addition to international cooperation, the USCG and BSEE have involved more than 80 federal, state, local, and maritime industry representatives in spill response plans. The group held a table top exercise on Nov. 18, 2011 to address a hypothetical international spill off the coast of Florida. The exercise allowed participants to discuss sensitive environmental areas, planning strategies, likely issues and response coordination principles that responders would face, as well as gather additional information to use in future planning.
The USCG notes the review conducted today does not confer any form of certification or endorsement under U.S. or international law.
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Cobalt International Energy, Inc. announced today that the Ensco 8503 drilling rig, contracted to Cobalt, has returned to the U.S. Gulf of Mexico following a sublet of the rig to drill a well in French Guiana. Cobalt received the required U.S. Coast Guard Certificate of Compliance and has subsequently received APD approval from the Bureau of Safety and Environmental Enforcement (BSEE) for the Ligurian #2 exploratory well.
The company expects to spud Ligurian #2 by year end. Ligurian is located in the Southern Green Canyon Area immediately adjacent to the 2009 Heidelberg discovery in which Cobalt is a part owner. After drilling Ligurian #2, Cobalt plans to move the rig to the North Platte #1 well location in the Garden Banks Area to drill that prospect. Cobalt anticipates that each of the Ligurian #2 and North Platte #1 exploratory wells will take approximately six months to drill.
“Obtaining the approved APD for Ligurian #2 represents another significant milestone for Cobalt”, said Van P. Whitfield, Cobalt’s Chief Operating Officer. “Ligurian #2 will be our first company-operated well drilled in the Gulf of Mexico since the deepwater drilling moratorium was enforced in May 2010. We are definitely excited about our return to drilling and are confident in our ability to drill this well safely. Additionally, we look forward to obtaining the additional permits required to drill and evaluate the multiple other significant world class prospects we have in our Gulf of Mexico portfolio.”
Cobalt is the operator of the Ligurian #2 well located in Green Canyon Block 814, with a 45% working interest. Other working interest owners include TOTAL E&P USA, INC. with a 30% working interest and Sonangol Exploration & Production International, Ltd. with a 25% working interest.
2012 Cash Expenditure Forecast
Cobalt also announced that its 2012 cash expenditures will be $500-$550 million. This range is consistent with previous guidance for 2011-13 cash expenditures of $1.3-$1.4 billion and compares with $170-$190 million recently estimated for 2011. The increased cash expenditures for 2012 relative to 2011 anticipates increased U.S. Gulf of Mexico and offshore Angola drilling activity and the payment of the first social bonus contribution associated with Angola Block 20. Cobalt’s net expenditures for 2012 exploration and appraisal drilling are forecasted at $250-$300 million. Each range of cash expenditures excludes changes to restricted cash items such as escrow agreements and collateralized letters of credit.
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