Shell’s massive Olympus tension leg platform (TLP) set sail from Ingleside, Texas on 14th July, for a 425 mile trek to its final home on the Mars Field in the Gulf of Mexico.
For 10 days, tugboats will transport the over 120,000 ton platform to the location where work will begin to secure the platform in place. The Olympus TLP will be moored to the seafloor by tendons grouped at each of the structure’s corners and will float in approximately 3000 feet of water.
The Olympus TLP is Shell’s sixth and largest tension leg platform and will provide process infrastructure for two of Shell’s deep water discoveries, West Boreas and South Deimos. The project also includes pipelines that will be routed through West Delta 143C, the recently installed shallow water platform.
The Olympus TLP is expected to start production in 2014, producing at a rate of 100k boe.
Royal Dutch Shell plc (Shell) today announces a final investment decision in the Stones ultra-deepwater project, a Gulf of Mexico oil and gas development expected to host the deepest production facility in the world.
This decision sets in motion the construction and fabrication of a floating production, storage, and offloading (FPSO) vessel and subsea infrastructure. The development will start with two subsea production wells tied back to the FPSO vessel, followed later by six additional production wells. This first phase of development is expected to have annual peak production of 50,000 boe/d from more than 250 million boe of recoverable resources. The Stones field has significant upside potential and is estimated to contain over 2 billion boe of oil in place.
“This important investment demonstrates our ongoing commitment to usher in the next generation of deepwater developments, which will deliver more production growth in the Americas,” said John Hollowell, Executive Vice President for Deepwater, Shell Upstream Americas. “We will continue our leadership in safe, innovative deepwater operations to help meet the growing demand for energy in the US.”
The Stones field is located in 9,500 feet (2,896 meters) of water, approximately 200 miles (320 kilometers) southwest of New Orleans, Louisiana, and was discovered in 2005. The project encompasses eight US Federal Outer Continental Shelf lease blocks in the Gulf of Mexico’s Lower Tertiary geologic trend. Shell has been one of the pioneers in the Lower Tertiary, establishing first production in the play from its Perdido Development.
An FPSO design was selected to safely develop and produce this ultra-deepwater discovery, while addressing the relative lack of infrastructure, seabed complexity, and unique reservoir properties. With an FPSO, tankers will transport oil from the Stones FPSO to US refineries, and gas will be transported by pipeline.
The launch of the Stones development is a key milestone as Shell continues to grow deepwater exploration and development in the Gulf of Mexico, having made significant progress recently on the Mars-B development project with the arrival of the Olympus tension leg platform. Shell is also in the concept selection phase for the Appomattox and Vito discoveries in the Gulf of Mexico.
Shell holds 100% interest and will operate the Stones development.
Neftegaz America Shelf LP (Neftegaz), an indirect independent subsidiary of Russia’s state-run oil company Rosneft, has acquired 30 percent interest in 20 deepwater exploration blocks in the Gulf of Mexico held by ExxonMobil, under an agreement signed by the two companies.
The 20 blocks have a total area of approximately 111,600 acres (450 square kilometers) in water depths ranging between 2,100 and 6,800 feet (640 and 2,070 meters). Seventeen are located in the Western Gulf of Mexico and three are in the Central Gulf of Mexico.
ExxonMobil retains 70 percent interest in the blocks and remains operator. Analysis of seismic data is under way. There is currently no production on the blocks.
Rosneft and ExxonMobil continue to implement the Strategic Cooperation Agreement signed in 2011, under which the companies and their subsidiaries plan to undertake joint exploration and development of hydrocarbon resources in Russia and other countries and to share technology and expertise. Under subsequent agreements between Neftegaz and ExxonMobil, Rosneft’s subsidiary gained the option to acquire interest in 20 blocks of its choosing from among ExxonMobil’s Gulf of Mexico exploration portfolio. The latest agreement represents the exercise of that option.
The agreement was signed by Igor I. Sechin, president of Rosneft, and Stephen M. Greenlee, president of ExxonMobil Exploration Company.
“ExxonMobil has a long history of safe oil and gas exploration in the Gulf of Mexico using state-of-the-art safety and environmental protection systems,” said Greenlee. “We look forward to working with Rosneft and its affiliates to explore these blocks using our leading-edge exploration and development technology and deepwater execution expertise.”
Sechin said, “This agreement provides Rosneft and its affiliates with access to one of the world’s most prolific basins. We believe joint efforts of our companies will ensure the most efficient development of these blocks, with application of the latest technologies and adhering to high environmental standards. Moreover, experience and knowledge acquired in the process may potentially be used when developing deepwater blocks in Russia, including in the Tuapse Trough in the Black Sea as envisaged under the Strategic Cooperation Agreement.”
ExxonMobil and Rosneft continue to implement a program of staff exchanges for technical and management employees to help strengthen the working relationships between the companies and provide valuable career development opportunities for employees of both companies.
The 20 blocks are:
Western Gulf of Mexico – Alaminos Canyon 569, 612, 613, 655, 656, 657, 698, 699, 700 and 701; East Breaks 429, 471, 472, 473 and 515; Keathley Canyon 529 and 573.
Central Gulf of Mexico – Walker Ridge 629, 673 and 717.
LLOG Exploration Company L.L.C. and Blackstone today announced the formation of a long-term, strategic partnership and have committed to invest over $1.2 billion to expand and accelerate LLOG’s offshore operations in the Gulf of Mexico.
The partnership will leverage the combined operational and financial resources of LLOG and private equity funds managed by Blackstone (collectively with their affiliates “Blackstone”) to expedite development of LLOG’s four recent deepwater discoveries as well as the exploration and appraisal of its extensive prospect inventory, which includes over 110 offshore leases. In addition, the partnership will expand LLOG’s asset base in the Gulf of Mexico through federal lease sale participation, farm-ins and M&A activities, further building upon its position as one of the largest private companies in the basin. This strategic partnership is the largest private equity financing executed in the Gulf of Mexico to date.
LLOG is one of the top 10 privately owned oil and gas companies in the U.S. and one of the largest private operators in the Gulf of Mexico (“GOM”). LLOG operates over 95% of its reserves and 86% of its prospects. During the last two years, the Company has made four consecutive discoveries, including two deepwater Gulf of Mexico discoveries to date during 2012, and over the last 10 years the Company has yielded an exploration drilling success rate of 70%.
Blackstone is one of the largest alternative asset managers in the world, with more than $205 billion in assets under management and a leading energy sector private equity investing franchise with an extensive, successful track record of investing in partnership with exceptional management teams seeking to fully capitalize on growth opportunities. Blackstone is currently investing from two private equity funds which aggregate over $19.3 billion of committed capital including Blackstone Energy Partners (“BEP”), its dedicated energy sector fund.
Who Dat not included
Last year, LLOG commenced production from its Who Dat discovery, an asset which is excluded from this partnership. The Who Dat Field, with estimated reserves of 200 to 300 million barrels of oil equivalent, is one of the largest discoveries in the GOM during the last several years. This field is producing through the first privately owned floating production system in the GOM, the Opti-Ex, which the Company acquired and brought online in less than three years, a record setting pace for a development of its type. Importantly, LLOG is also focused on maintaining a strong long-term track record in the areas of health, safety and environment and was the most recent company to be awarded the coveted Safe Operations and Reporting (SOAR) Award by the industry regulatory agency.
Scott Gutterman, LLOG’s CEO, commented, “We are very excited to form this unique, significant, and long-term strategic partnership with Blackstone. This is the first time that we have joined forces with an equity partner on a Company wide basis, and we cannot imagine a more suitable partner to mark this significant inflection point for LLOG. This transaction is indicative of the many exciting assets and opportunities we have at LLOG and will enable us to capture opportunities that we could not otherwise pursue. We believe the Gulf of Mexico deepwater is one of the most attractive oil plays in the world, and we expect to continue to be a long-term, significant player in the basin. I believe that with our deep technical and operations team, experience and assets in the GOM combined with Blackstone’s team, extensive capital resources, oil and gas expertise and industry resources, we will be able to take our business, activity levels and assets to the next level. We are very excited about the risk profile and depth of our prospect inventory, the associated resource potential and the operational, capital and human resources we will bring to safely develop and expand our asset base for our partnership.”
Angelo Acconcia, the Managing Director who leads Blackstone Energy Partners’ global oil and gas investing practice, commented, “We are very excited to form this long-term partnership with LLOG to accelerate the growth and development of LLOG’s attractive and extensive portfolio of discoveries and prospects. LLOG has a very talented and experienced technical and operations team, one of the best we have seen in the GOM and the Company has an incredible track record of exploration and development success, operational excellence and strong safety and environmental practices. To complement this, LLOG is a highly efficient deepwater operator, with the history and ability to accelerate development, minimizing the timeframe to first production and significantly increasing project returns.” David Foley, Chief Executive Officer of Blackstone Energy Partners, stated, “We evaluate many potential investments in the energy sector but choose only a small number each year to pursue that we believe represent a combination of the most exceptional management teams with unique and large-scale opportunities to create value; LLOG is a great example of this.”