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Israel: Pinnacles Delivers First Gas

Israel’s  Delek Group has been informed by the operator, Noble Energy Mediterranean Ltd., that on June 12, 2012, development of Pinnacles #1 was completed and gas began to flow from it.

Pinnacles offshore well was recently linked by a subsea pipeline to the nearby Mari B production platform. Helix ESG’s reeled pipelay vessel, Express, which in April arrived at the port city of Haifa, Israel, completed the SURF (Subsea Umbilicals, Risers and Flowlines) work.

According to the Israel-based financial newspaper The Globes, Pinnacles well will produce 150 million cubic feet of gas per day.

Noble Energy Mediterranean Vice President Lawson Freeman told The Globes that the company was excited to bring the Pinnacles well on stream. He also added that the company was pushing hard to accelerate the Noa development in the same way.

Development of the Noa field is geared to allow for additional supplies of natural gas to the Israeli market, until the start of natural gas supplies from the Tamar project in early 2013.

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USA: ATP Resumes Recompletion Works at Telemark Hub

ATP Oil & Gas Corporation today announced that it has resumed recompletion operations at the Mississippi Canyon (MC) 941 A-2 well at the company’s Telemark Hub. The recompletion was suspended while the company recovered a piece of tubing that was stuck in the casing.

All of the tubing has now been removed from the casing. The MC 941 A-2 recompletion operations to perforate and frac-pack the B upper and lower sands are expected to conclude during second quarter 2012. MC 941 is located in the Mirage Field at the Telemark Hub location utilizing the ATP Titan floating drilling and production platform.

ATP operates the ATP Titan and Telemark Hub which is in approximately 4,000 feet of water with a 100% working interest and holds a 100% ownership in ATP Titan LLC which owns the ATP Titan and associated pipelines and infrastructure.

ATP Oil & Gas is an international offshore oil and gas development and production company with operations in the Gulf of Mexico, Mediterranean Sea and the North Sea. The company trades publicly as ATPG on the NASDAQ Global Select Market. For more information about ATP Oil & Gas Corporation.

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USA: ATP Provides Reserves and Production Update

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ATP Oil & Gas Corporation today announced an increase in its estimated year-end 2011 proved and probable pre-tax PV-10 value to $7.3 billion based on SEC pricing, up 52% from $4.8 billion at year-end 2010.

ATP also provided an update on production for full-year 2011 which averaged an estimated 24.6 thousand barrels per day (MBoe/d), an increase of 17% over 2010.

Reserves – ATP estimates year-end 2011 proved reserves of 118.9 MMBoe compared to 126.1 MMBoe at year-end 2010. ATP estimates proved and probable reserves of 194.4 MMBoe at year-end 2011, compared to 211.3 MMBoe at year-end 2010. The changes were primarily a result of production of 9.0 MMBoe in 2011 and revisions to oil and gas reserves. On a Boe basis, ATP estimates that oil and natural gas liquids (NGLs) represent 66% of its year-end 2011 proved reserves and 65% of proved and probable reserves, compared to 60% and 59%, respectively, at year-end 2010.

ATP estimates a year-end 2011 SEC pre-tax PV-10 value of $4.2 billion for its proved reserves and $7.3 billion for its proved and probable reserves, compared to $2.6 billion and $4.8 billion, respectively, at year-end 2010. This increase is primarily a result of pricing, but other factors include timing and an increase in oil and NGL reserves.

Since independent reservoir engineers are finalizing estimates of ATP’s oil and natural gas reserves for year-end 2011, ATP will issue its final reserve amounts utilizing SEC pricing and reconciliation in conjunction with filing its Form 10-K, anticipated in March 2012.

Production – ATP’s production in the fourth quarter 2011 averaged 24.8 MBoe/d compared to 24.2 MBoe/d in the third quarter 2011. The fourth quarter average benefited from a 1.4 MBoe/d recognition of royalty relief related to 2010 production. Not including this benefit, average production in the fourth quarter was 23.4 MBoe/d, of which 70% was oil, compared to 69% in the third quarter 2011. ATP intends to conduct the previously announced sleeve shift at the Mississippi Canyon (MC) 941 A-1 well in the first quarter 2012 after production is established at the MC 942 #2 well. This sleeve shift had previously been scheduled in the fourth quarter of 2011. ATP estimates that opening the sleeve in the MC 941 A-1 well will increase production by 1.5 MBoe/d.

ATP anticipates an increase in production from the completion of the MC 942 #2 well during the first quarter 2012 and an increase later in the year with the installation of the pipeline for the two Clipper wells that were completed and tested in 2011. The installation of the Clipper pipeline is scheduled to begin in the third quarter 2012 with production expected in the late third quarter/early fourth quarter 2012.

ATP Oil & Gas is an international offshore oil and gas development and production company with operations in the Gulf of Mexico, Mediterranean Sea and the North Sea. The company trades publicly as ATPG on the NASDAQ Global Select Market.

Source: ATP Oil & Gas, February 24, 2012

Scientists Aboard Iberian Coast Ocean Drilling Expedition Report Early Findings

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Mediterranean bottom currents and the sediment deposits they leave behind offer new insights into global climate change, the opening and closing of ocean circulation gateways and locations where hydrocarbon deposits may lie buried under the sea.

A team of 35 scientists from 14 countries recently returned from an expedition off the southwest coast of Iberia and the nearby Gulf of Cadiz. There the geologists collected core samples of sediments that contain a detailed record of the Mediterranean’s history. The scientists retrieved the samples by drilling into the ocean floor during an eight-week scientific expedition onboard the ship JOIDES Resolution.

The group–researchers participating in Integrated Ocean Drilling Program (IODP) Expedition 339: Mediterranean Outflow–is the first to retrieve sediment samples from deep below the seafloor in this region.

Much of the sediment in the cores is known as “contourite” because the currents that deposit it closely follow the contours of the ocean basin.

“The recovery of nearly four kilometers of contourite sediments deposited from deep underwater currents presents a superb opportunity to understand water flow from the Mediterranean Sea to the Atlantic Ocean,” says Jamie Allan, program director at the National Science Foundation (NSF), which co-funds IODP.

“Knowledge of this water flow is important for understanding Earth’s climate history in the last five million years.”

“We now have a much greater insight into the distinctive character of contourites, and have validated beyond doubt the existing paradigm for this type of sedimentation,” says Dorrik Stow of Heriot-Watt University in the United Kingdom and co-chief scientist for Expedition 339.

The world’s oceans are far from static. Large currents flow at various depths beneath the surface. These currents form a global conveyor belt that transfers heat energy and helps buffer Earth’s climate.

Critical gateways in the oceans affect circulation of these major currents.

The Strait of Gibraltar is one such gateway. It re-opened less than six million years ago.

Today, deep below the surface, there is a powerful cascade of Mediterranean water spilling out through the strait into the Atlantic Ocean.

Because this water is saltier than the Atlantic–and therefore heavier–it plunges more than 1,000 meters downslope, scouring the rocky seafloor, carving deep-sea canyons and building up mountains of mud on a little-known submarine landscape.

The sediments hold a record of climate change and tectonic activity that spans much of the past 5.3 million years.

The team found evidence for a “tectonic pulse” at the junction between the African and European tectonic plates, which is responsible for the rising and falling of key structures in and around the gateway.

This event also led to strong earthquakes and tsunamis that dumped large flows of debris and sand into the deep sea.

At four of the seven drill sites, there was also a major chunk of the geologic record missing from the sediment cores–evidence of a strong current that scoured the seafloor.

“We set out to understand how the Strait of Gibraltar acted first as a barrier and then a gateway over the past six million years,” says Javier Hernandez-Molina of the University of Vigo in Spain and co-chief scientist for Expedition 339. “We now have that understanding and a record of a deep, powerful Mediterranean outflow through the Gibraltar gateway.”

The first drill site, located on the west Portuguese margin, provided the most complete marine sediment record of climate change over the past 1.5 million years of Earth history.

The sediment cores cover at least four major ice ages and contain a new marine archive to compare against ice core records from Greenland and Antarctica, among other land-based records.

The team was surprised to find exactly the same climate signal in the mountains of contourite mud they drilled in the Gulf of Cádiz.

Because these muds were deposited much faster than the sediments at the Portuguese margin site, the record from these cores could prove to yield even richer, more detailed climate information.

“Cracking the climate code will be more difficult for contourites because they receive a mixed assortment of sediment from varying sources,” Hernandez-Molina says.

“But the potential story that unfolds may be even more significant. The oceans and climate are inextricably linked. It seems there is an irrepressible signal of this nexus in contourite sediments.”

The team also found more sand among the contourite sediments than expected.

The scientists found this sand filling the contourite channels, deposited as thick layers within mountains of mud, and in a single, vast sand sheet that spreads out nearly 100 kilometers from the Gibraltar gateway.

All testify to the strength, velocity and duration of the Mediterranean bottom currents. The finding could affect future oil and gas exploration, the researchers believe.

“The thickness, extent and properties of these sands make them an ideal target in places where they are buried deeply enough to allow for the trapping of hydrocarbons,” Stow explains.

The sands are deposited in a different manner in channels and terraces cut by bottom currents; in contrast, typical reservoirs form in sediments deposited by downslope “turbidity” currents.

“The sand is especially clean and well-sorted, and therefore very porous and permeable,” says Stow. “Our findings could herald a significant shift in future exploration targets.”

IODP is an international research program dedicated to advancing scientific understanding of the Earth through drilling, coring, and monitoring the subseafloor.

IODP is supported by two lead agencies: the U.S. National Science Foundation and Japan’s Ministry of Education, Culture, Sports, Science, and Technology. Additional program support comes from the European Consortium for Ocean Research Drilling, the Australia-New Zealand IODP Consortium, India’s Ministry of Earth Sciences, the People’s Republic of China (Ministry of Science and Technology), and the Korea Institute of Geoscience and Mineral Resources.

The JOIDES Resolution is a scientific research vessel managed by the U.S. Implementing Organization of IODP (USIO). Texas A&M University, Lamont-Doherty Earth Observatory of Columbia University, and the Consortium for Ocean Leadership comprise the USIO.

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A New Era of Gunboat Diplomacy

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Navies Ramping Up: Three Contested Regions

By MARK LANDLER
Published: November 12, 2011

IT may seem strange in an era of cyberwarfare and drone attacks, but the newest front in the rivalry between the United States and China is a tropical sea, where the drive to tap rich offshore oil and gas reserves has set off a conflict akin to the gunboat diplomacy of the 19th century.

The Obama administration first waded into the treacherous waters of the South China Sea last year when Secretary of State Hillary Rodham Clinton declared, at a tense meeting of Asian countries in Hanoi, that the United States would join Vietnam, the Philippines and other countries in resisting Beijing’s efforts to dominate the sea. China, predictably, was enraged by what it viewed as American meddling.

For all its echoes of the 1800s, not to mention the cold war, the showdown in the South China Sea augurs a new type of maritime conflict — one that is playing out from the Mediterranean Sea to the Arctic Ocean, where fuel-hungry economic powers, newly accessible undersea energy riches and even changes in the earth’s climate are conspiring to create a 21st-century contest for the seas.

China is not alone in its maritime ambitions. Turkey has clashed with Cyprus and stoked tensions with Greece and Israel over natural-gas fields that lie under the eastern Mediterranean. Several powers, including Russia, Canada and the United States, are eagerly circling the Arctic, where melting polar ice is opening up new shipping routes and the tantalizing possibility of vast oil and gas deposits beneath.

“This hunt for resources is going to consume large bodies of water around the world for at least the next couple of decades,” Mrs. Clinton said in a recent interview, describing a global competition that sounds like a watery Great Game.

Such tensions are sure to shadow President Obama this week, as he meets with leaders from China and other Asian countries in Honolulu and on the Indonesian island of Bali. Administration officials said they expected all sides to tamp down disagreements, though that won’t mask the coming conflicts.

“Underlying all of this is the recognition that an increasing share of oil resources is offshore,” said Daniel Yergin, an energy expert and author of a new book, “The Quest: Energy, Security, and the Remaking of the Modern World.” “When you have energy resources on land,” he said, “you know where things stand. When they’re offshore, things can get murkier.”

Twenty-nine million barrels of oil a day, one-third of global production, now come from offshore fields, Mr. Yergin said, a share that will rise steadily. The South China Sea alone is estimated to have 61 billion barrels of petroleum — oil and gas — plus 54 billion yet to be discovered, while the Arctic is projected to have 238 billion barrels, with possibly twice that in undiscovered sources.

As countries race to erect drilling rigs and send oil exploration vessels to comb the seabed, conflicting maritime claims are helping to fuel a naval arms race. It is no coincidence that the countries with the fastest-growing navies are those with stakes in these energy zones.

China expanded from 2 Soviet-era destroyers in 1990 to 13 modern destroyers in 2010, according to the International Institute for Strategic Studies in London. In its drive for a blue-water navy, one that operates in the deep waters of open oceans, it is also building an aircraft carrier. Malaysia and Vietnam are beefing up their navies with frigates and submarines. India, which wants to make sure it has access to the Far East, is bulking up. And the Israeli Navy is pushing for more vessels to counter Turkish warships circling Israeli drilling rigs.

“Countries want to make sure they have the ability to develop resources and to make sure their trading routes are protected,” said David L. Goldwyn, a former special envoy for international energy affairs at the State Department.

This competition is also behind calls for the United States to bolster its naval strength, even at a time of budget cuts. Mitt Romney, considered by many the Republican front-runner in the presidential race, declared recently he would “reverse the hollowing of our Navy and announce an initiative to increase the shipbuilding rate from 9 per year to 15.” With anemic building rates and tighter maintenance budgets, analysts say, the Navy has been forced to cope with an aging fleet that some say is not up to its challenges.

Even so, the Obama administration has been an active practitioner of gunboat diplomacy, a term that refers to achieving foreign-policy objectives through vivid displays of naval might. Last fall, Mr. Obama sent the aircraft carrier George Washington to the Yellow Sea for joint exercises with South Korea, sending a message to both North Korea and its key backer, China. The move echoed the Clinton administration’s decision in 1996 to send the Seventh Fleet to warn China against attacking Taiwan.

The United States has used gunboat diplomacy in Asia at least since 1853, when Commodore Matthew C. Perry sailed his fleet into Tokyo Bay, intimidating Japan into opening up to foreign trade. But these days, the Chinese are fashioning an Asian version of the Monroe Doctrine to press their imperial ambitions.

FOR Mr. Obama, whose roots in Hawaii and Indonesia have imbued him with a strong Pacific worldview, the drawdown in Iraq and Afghanistan gives him a good pretext to turn his gaze eastward. The United States has worked to shore up its ties to old Asian allies, like Japan and South Korea, as well as new giants like India. The goal, though administration officials are loath to say it publicly, is to assemble a coalition to counterbalance China’s growing power.

On a recent tour of Asia, Defense Secretary Leon E. Panetta pledged not to retreat from the region. “If anything,” he said, “we’re going to strengthen our presence in the Pacific.” This week, Mr. Obama is expected to announce an agreement with Australia for a permanent American military presence there.

On land, the race for energy supplies is not new, of course. From the 1950s to the 1970s, the United States maneuvered to keep Russia out of oil-rich Iran. Today, China is busy cutting deals in energy-rich Africa. But technology has changed the equation, putting undersea oil and gas fields into play as never before.

“At root, it’s a question of when and how you will have these conflicts,” said James B. Steinberg, a former deputy secretary of state with experience in all three regions. “Will countries see these as win-win opportunities, or will they see them as zero-sum competitions?”

For China, the South China Sea has long been crucial as a supply route for oil and other raw materials to fuel its economy. China’s claims have deep historical roots, dating from the 1940s, when Chiang Kai-shek’s Nationalists drew a dotted line in the shape of a cow’s tongue extending south of China, embracing most the sea and two disputed island chains, the Paracels and the Spratlys.

Quarrels over these hunks of volcanic rock wouldn’t matter much, except that China, Vietnam and the Philippines are running into one another in the race for oil. Last spring, in two separate incidents, Vietnam accused Chinese vessels of deliberately cutting the seismic survey cables of an oil exploration ship. A former American official said his nightmare scenario would be a Chinese warship’s firing on an Exxon oil-drilling ship.

If the South China Sea is simmering, then the eastern Mediterranean is seething. There, claims to huge natural-gas reserves off the coast of Cyprus and Lebanon have raised tensions with Turkey, which occupies half of Cyprus, as well as with Israel. Cyprus and Israel are drilling for gas, angering Turkey. The militant Islamic group Hezbollah, in Lebanon, has threatened to attack Israeli gas rigs.

Further complicating this is the bitter rift between Turkey and Israel after the deadly Israeli commando interception of a Turkish flotilla trying to transport aid to Palestinians in Gaza last year.

“The Turks are saying, ‘The Israelis humiliated us; what can we do in return?’” said Charles K. Ebinger, a senior fellow at the Brookings Institution. “Part of it is just the greater assertiveness of Turkey’s foreign policy everywhere.”

Perhaps the least dangerous arena of competition lies in the frigid north, partly because experts believe that many of the Arctic’s mineral deposits lie within one or another of the 200-mile exclusive economic zones of the countries that ring the ocean. But even countries with no Arctic coastline, like China and South Korea, are sending icebreakers there to explore weather patterns and fish migration.

Ironically, the biggest bone of contention there is between two stalwart allies, the United States and Canada. Melting ice has opened up the fabled Northwest Passage, which runs through an archipelago of islands in northern Canada. The United States views the passage as an international waterway, giving American ships unlimited access. The Canadian government insists it is an inland waterway, meaning that foreign ships can use it only with Ottawa’s approval.

Canada and the United States are highly unlikely to go to war, of course, though the wrangling could keep maritime lawyers busy for years. As temperatures climb, officials warn, tempers may follow. “It’s a serious legal dispute,” Mr. Steinberg said. “When it is ice-free, there will be some real issues.”

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