Exxon Mobil Corporation is commencing development of the Julia oil field in the Gulf of Mexico, the oil giant announced yesterday in a press release.
Capital cost for the project, which is expected to begin oil production in 2016, is estimated to be more than $4 billion. The field was discovered in 2007 and is estimated to have nearly six billion barrels of resource in place.
“The development of Julia will provide a new source of domestic energy and well-paying jobs over the next several years,” said Neil W. Duffin, president of ExxonMobil Development Company. “Access to resources such as Julia will contribute to U.S. energy security for many years to come.”
The initial development phase is being designed for daily production of 34,000 barrels of oil and includes six wells with subsea tie-backs to the Jack & St. Malo production facility operated by Chevron U.S.A. Inc. Julia project front end engineering design has been completed and the engineering, procurement and construction contracts have been placed.
“Julia is one of the first large oil discoveries in the ultra-deepwater frontier of the Gulf of Mexico,” said Duffin. “This resource is located more than 30,000 feet below the ocean’s surface. Enhanced technologies will be deployed to ensure the safe and environmentally responsible development of this important energy resource.”
The Julia field comprises five leases in the ultra-deepwater Walker Ridge area of the Gulf of Mexico, 265 miles southwest of New Orleans. The blocks are WR-584, WR-627, WR-628, WR-540 and WR-583.
ExxonMobil, the operator, and Statoil Gulf of Mexico LLC each hold a 50 percent interest in the Julia unit.
Over the past decade, ExxonMobil has drilled 36 deepwater wells in the Gulf of Mexico in water ranging from 4,000 feet to 8,700 feet.
The contract, divided into exploration, development and production phases, is valid for approximately 30 years. The parties have agreed to a minimum working program for the exploration phase, which includes geological surveys and exploration drilling. Apache will take full responsibility for all costs during the exploration phase.
If a commercial find has been made and brought into production, Apache will receive reimbursement for such costs. The contract offers Staatsolie the opportunity for a stake in the development phase of up to 20 percent.
Block 53 is located at approximately 130 kilometers off the northwest coast of Paramaribo. The exploration period under the contract is divided into two phases with a combined investment of approximately US$230 million. The duration of the first phase is scheduled for three years with an optional second phase of two and a half years. In addition to a large 3D seismic survey, two wells will be drilled in the first phase with a third well to be drilled in the optional second phase. The production sharing contract explicitly deals with inspection, safety and the environment. There are also special provisions for employment of local cadre, training, social programs and the dismantling of facilities at the end of operations.
The Community Development Block Grant program is a perfect example of the blurring of responsibility between the federal government and the states. The program’s roots go back to the Great Society and the wishful belief that the problems of urban Americans could be solved with handouts from Washington. Instead, the program “has degenerated into a federal slush fund for pet projects of local politicians and politically connected businesses.”
That quote comes from Rep. Tom McClintock (R-CA) who introduced an amendment this week to terminate CDBGs. As McClintock explained to his House colleagues, it is not the federal government’s responsibility to fund purely parochial activities:
Even in the best of circumstances, these are all projects that exclusively benefit local communities or private interests and ought to be paid for exclusively by those local communities or private interests. They are of such questionable merit that no city council is willing to face its constituents and say, this is how we’ve spent your local taxes. But they are more than happy to spend somebody else’s federal taxes.
Unfortunately, McClintock’s words fell upon deaf ears as his amendment was voted down 80 to 342. Not a single Democrat supported the amendment. But it was the 156 Republicans who voted against the amendment that doomed it. Among those Republicans voting “no” was House Budget Committee chairman Paul Ryan (R-WI). Worse, only 33 percent of the GOP “Tea Party Freshmen” voted to terminate a program that is completely at odds with the principles of limited government.
As I noted back in May, many of the GOP freshmen have switched from tea to Beltway Kool-Aid. Take, for example, tea party favorite Allen West of Florida. On West’s congressional website, he states that “As your Congressman, I will curb out of control Government spending.” He also says that “we need to challenge the status quo in Washington and stop the floodgates of government spending” and that he will “carry the torch of conservative, small government principles with me to Washington.” West, however, voted to save the CDBG program and he also voted back in May to save the Economic Development Administration, which is another parochial slush fund. In April, he accused Democrats of being communists. That’s pretty rich given that he proceeded to vote to protect programs that engage in central planning.
- Freshman Republicans Switch from Tea to Kool-Aid (cato-at-liberty.org)
- Republicans Join Democrats to Save Corporate Welfare (Again) (cato-at-liberty.org)
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.”
The approval of the Development Plan now enables ExxonMobil Canada Properties Limited to proceed with development of the Hebron Field, which is estimated to contain 707 million barrels of of recoverable resources..
Hebron is a heavy oil field estimated to have 400 – 700 million barrels The field was first discovered in 1981, and is located offshore Newfoundland and Labrador in the Jeanne d’Arc Basin 350 kilometres southeast of St. John’s, the capital of Newfoundland and Labrador. It is approximately 9 kilometres north of the Terra Nova project, 32 kilometres southeast of the Hibernia project, and 46 kilometres from the White Rose project. The water depth at Hebron is approximately 92 metres.
The Hebron field will be developed using a stand-alone concrete gravity based structure (GBS). The GBS will consist of a reinforced concrete structure designed to withstand sea ice, icebergs, and meteorological and oceanographic conditions at the offshore Hebron Project Area. The preliminary GBS concept has a single main shaft supporting the topsides, encompassing all wells.
- Kiewit-Kvaerner JV Work on Exxon’s Hebron GBS in Canada (mb50.wordpress.com)
- Canada: WorleyParsons Wins Hebron Topsides Contract from ExxonMobil (mb50.wordpress.com)